Total implied fuel demand averaged 20.6 million barrels a day in the past four weeks, down 3.4 percent from a year earlier, an Energy Department report on March 5 showed. U.S. gasoline stockpiles rose 1.66 million barrels to 234.3 million last week, the highest since January 1994.
The crude-oil market may continue to draw buying in the near term based on financial factors such as the weakness in the U.S. dollar, but at some stage we think the weakness in the physical market, where gasoline inventories are at the highest level since the 1990s, may gain wider notice.
Energy and metals prices have surged over the past year as the U.S. dollar plunged, prompting investors to seek a hedge against inflation. The euro climbed to a record $1.5378 yesterday.
Crude oil for April delivery rose $3.63, or 3.6 percent, to $105.47 a barrel so far this week on the New York Mercantile Exchange. Futures reached $105.97 a barrel yesterday, the highest price since trading began in 1983.