Spring is in the air, and with it, the smell of diesel. Farmers are filling up, causing fuel supplies to tighten in the latest week. The extent of the draw was much bigger than the trade anticipated, sparking a rally across the energy market on Wednesday before profit taking set in.
Distillate supplies fell by 3.4 million barrels in the latest week, according to this morning's weekly Petroleum Inventory. The trade anticipated only a minor reduction, sending prices sharply higher in early trade. However, by the close, crude held on to only minor gains, with gasoline down and heating oil flat.
Most of the drop in stocks today came in diesel categories, a sign of seasonal agricultural demand as the spring fieldwork season begins. Wholesale prices and basis at the Gulf also were stronger this week, while heating oil futures reflected the end of winter discounting.
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