Statistics out, range in

DOE +1.6 CL RB -4.3 HO +2.8
API CL -2.5, RB -1.8, HO +3.1

After API data was released early, crude rallied until DOEs put a damper on things and the day remained range bound. RB was the only ray of hope on the bullish side with draws against a backdrop perception of falling demand. Heat cracks came in further today down to $17.25 /bbl referencing September futures. This level is back to a range that should be more appealing to consumer hedgers. However, the heating oil distribution industry and diesel market seems to be slow to take advantage of this opportunity, awaiting even lower prices. There has not been significant put activity to suggest a great fear of a quick move lower.

Hedgers needing inventory protection are wise to look at out-of-the-money puts that are reasonably valued by the market.

As a footnote, financial markets continued the rally launched Tuesday. Energy equities suggest the Monday selloff was an overreaction to weakening crude prices. Additionally, the USD continues to strengthen against major currencies.