The Energy Information Administration (EIA) reported a more supportive snapshot of petroleum supply and demand that the American Petroleum Institute (API) reported, and while the report was not as bullish as pre-API report expectations from a seasonal standpoint it was supportive.

The EIA reported that total commercial petroleum stocks increased 2.75MB and while that might have been more than expected, it pales in comparison to the 7-million-barrel increase in supply a year ago. In fact, commercial inventories now stand at a whopping 81 million barrels below a year ago, and one of the biggest year over year declines in history.

Crude supply reportedly increased by 1.854 million barrels, the third increase in supply out of the last four but that was offset somewhat by a 1.5 million barrel drop in the Cushing Oklahoma delivery point. The overall crude supply number was enhanced by a 0.7-million-barrel release of oil from the U.S. Strategic Petroleum Reserve. Yet, crude demand will remain strong as refiners run at near record rates at 91% of capacity to try to catch up with distillate supply that is at this time well below normal for this time of year. The EIA reported that distillate supply increased by 700,000 barrels as domestic demand fell 1.5million barrels a day.

Still, many distillate users are under-hedged as they were caught in the lower for the longer hype that kept many from locking in at better prices. Many farmers already reeling from low corn prices are getting hit with rising diesel costs as U.S. refiners are trying to satisfy strong global distillate demand.

U.S. diesel exports are surging increasing by 28,000 barrels a day last week. Laura Blewitt and Amy Stillman of Bloomberg news report that “Mexico is scouring the earth to stock up on diesel fuel before market-liberalization measures take effect. Petroleos Mexicanos, the country’s state-run oil company, has been on a buying spree of about a tanker load of diesel a day from the U.S. alone this year and recently purchased it as far afield as the United Arab Emirates and China. Mexico is set to lift price limits on the fuel used to run heavy trucks and generate electricity, making 2018 prices uncertain.”