As Americans respond to record high gas prices (today is the 22nd straight day of record highs) by cutting usage, crude inventories were expected to grow. However, crude inventories unexpectedly fell by 8.8 million barrels last week, far short of the consensus of a 750,000 barrel increase.
While the Energy Information Administration (EIA) claimed “the drop was due to temporary delays in crude oil tanker off-loadings on the Gulf Coast”, the surprise miss jolted an already volatile oil market. Oil prices shot from under $130 to above $133. While the market is cooling off now, any downward oil price momentum has been killed.