Countervailing the patently bearish inventory news from crude oil and heating oil yesterday, was news that US Gasoline stocks now stand at only 202.744 million barrels, which in turn is the lowest for this week since 2000. However, EIA gasoline stocks rose 943,000 barrels yesterday and they are now 11.857 million barrels below last year and 7.741 million below the five year average. Average total gasoline demand for the past four weeks was down 5.04% compared to last year. On the other hand, the markets are clearly rushing to factor in the potential for a further build up in gasoline supplies ahead, especially as central banks seem to be content to allow for even more slowing ahead. While the range down extension this morning factors in a portion of the macro economic condition and the fear of building supply ahead, a return to the October 2011 lows of $2.43 could have a very negative outcome for the EU also factored into prices. While the August RBOB contract managed to fill an old gap on the charts and then bounced back, the fundamental picture looks to leave the bear camp with the edge. Critical near term resistance today stands at $2.50, but those looking for a major low probably need to be patient.
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