While the energy markets are focused on crude and crude alone, the total U.S. petroleum stocks have been tightening more significantly. The Energy Information Administration (EIA) reported that the total commercial petroleum stocks fell 4.7 million barrels compared to a 6.9 million barrel increase a year ago. In fact, if you compare year over year supply, the total petroleum inventories including the Strategic Petroleum Reserve fell more than 5.0 million bbl during the week-ended April 7, down 5.3 million bbl to 2.0242 billion bbl, and 3.5 million bbl below year ago. This is the first year-over-year total petroleum storage deficit since August 29, 2014 and it comes as the International Energy Agency (IEA) predicts that the global oil market is now “very close” to reaching a balance even as they lower demand growth and raise stocks.

Unless you put crude oil in your gas tank it might be time to stop focusing on petroleum stocks. Ready to use “gasoline” stocks fell 3 million barrels this week and are now below the 5- year average range. This is one reason why prices are on the rise at the pump. It seems that refiners are being caught by surprise at the strength of demand. The drop-in demand we saw earlier in the year was a head fake that put refiners on the wrong path. Refiners did ramp up gasoline production to 9.9 million barrels per day but even with that effort, the supply fell. Crude supply finally fell by 2. 2 million barrels but some are worried that Cushing, OK stocks posted a small build. Domestic oil production rose 36k bpd, with an adjustment number fell 215k bpd.

The International Energy Agency reported today that their forecast is expected to slow for the second year in a row but still will be an impressive 1.3 million barrels of oil a day. Yet they did warn that its forecast for 2017 demand could still “prove to be optimistic.” Still the IEA reportedly said that, “We’re seeing demand growing fairly steadily in the oil market and we think that the balance is coming together slowly but surely and the numbers are there to support it. We think that as the year progresses that rebalancing will become more and more apparent in the drawdown of actual physical stocks.”