DOE's were seen as more negative than API's and will lead to a slightly more
bearish tone this morning.

Other nuggets on stats:
1) Gasoline demand remains solid.
2) Heating oil days of supply fell to 8 over last year and demand reflected
colder than normal temps in the US.

Anyway, not a huge surprise in the numbers. The large range game should continue
as conflicting geopolitical and fundamental factors cancel each other out and
lead to inaction. OPEC is now reported leaking up to 1mmb/d, Russian
overproduction is still a concern. However, Iran and Iraq may be draw into the
larger military conflict and Iran's current war of words with Israel makes that
seem more immediate.

So, what to do? Well, we're still in a larger downtrend, as stocks and negative
paper spreads make clear. Many are still pinning their hopes on gas season, and
demand is still nicely robust. The key will be blending ability, and the overall
health of the economy. The uncertainty of last year for refiners is largely
removed due to the resolution of the Unocal debacle. That at least gives
refiners and blenders a clear playing field. Now the economy; If chemical, jet
and industrial demand remains soft, refiners won't see competiton for those
blending components. So, we probably will still not see anyone putting all their
cards on the table until the start of March, but my gut says there will be no
problem making summer spec gas and that talk of a huge gas demand season is
largely overblown. Passenger load on airlines now looks to be less than 10%
below pre-Sept 11th levels, and a soft economy doesn't necessarily imply people
will drive to vacations rather than fly, they may just cut back entirely.
Anyway, until the question of gas season is solved we will likely not budge from
the existing, but volatile, $18-$21 range. April-June gas cracks did settle back
at $7.00, but that's not a  big deal given that the range of these over the past
two months is $6-$7.50.




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