Relief at the pump on the horizon?

Could we finally be getting ready for a little relief at the pumps? I doubt that we are going to get a major break in prices in the weeks ahead, but looking at this week's gasoline inventories numbers give us at least a bit of hope.

Over the past couple months we have seen a major fall in gasoline inventories as refineries have been unable to keep up with unusually high demand, but today we see a shift in that trend.

When the Energy Information Administration released its weekly numbers today, analysts had been expecting to see gasoline inventories show a rise of about 100,000 barrels. Surprising everyone, we actually got some good news that inventories rose much more than expected, with a gain of 400,000 barrels.

While this is definitely a good sign, we are a far cry from being out of the woods just yet. We have to keep reminding ourselves that we are still not in the high demand peak summer driving months. Demand growth has been decreasing, but we will just have to wait and see how this continues as the weather starts to get nicer and people begin taking their vacations.

Most of the recent blame for the record high gasoline prices has been given to unusually low production out of our refineries. We always see refinery capacities lower during the spring months as companies typically use this time of year to shut down refineries for maintenance and repairs, but this year it seems like things have been much worse than usual. In possibly a good indication of things to come, last week we saw production jump by 0.7% to 89%, but this is still slightly below the 89.2% production that analysts had been hoping to see.