Crude oil rally running out of steam
After being below the five-year range in September 2014, inventories have gradually pushed higher over the last 18 months to now finally clamber above this range. Distillate stocks reached a record of 186 million barrels in December 1982 (think: E.T., Tootsie #1 at the movies). Inventories generally bottom out each year at the end of winter (after peak demand), building through the summer as refineries go full-tilt to meet higher gasoline demand for summer driving season. Should we see a similar build to inventories as we saw last year, we should well be testing record inventory levels in the fall.