Distillate Inventories Rise More Than Estimates

- The EIA reported crude inventories rose 2.8M barrels vs. estimates of a 1.0M barrel decline. Gasoline inventories declined 2.09M barrels vs. estimates of a 2.0M barrel fall. Distillate inventories rose 2.6M barrels vs. estimates of a 1.75M barrel rise.

BOTTOM LINE: The energy inventory numbers were once again bearish for energy. So far there is little reaction in the trading pit. I continue to believe that oil pricing is in the grips of a mania and is not supported by the underlying fundamentals. The substantial second-half decline in oil prices I predicted at the beginning of the year will likely begin around the first half of September as terrorism and hurricane fears peak.