We have been hearing a lot about refinery output this year as unusually low production has led to soaring gasoline prices at the pump. It appeared as though things had gotten back on track, with capacity rising above 90% for the past two week, but in today's weekly inventory report, the Energy Information Administration stated that production has once again fallen under 90%.

Most of our attention lately has been geared toward following gasoline inventories in hopes that we would see levels rise enough to give us a little relief at the pump. Today we saw exactly that, with gasoline supplies rising by a generous 3.5 million barrels last week which was well above the 1.4 million barrels that analysts had been expecting to see. While this would typically lead us to expect to see the price of oil dropping, that is not what we are seeing today, with oil prices actually ticking up $0.30 to $65.91. The reason? You guessed it... falling refinery output.

Last week when the EIA released its weekly report we saw that refineries were running at 91.1%, which was still below where we would like to see them, but definitely an improvement. This week we see production falling below the psychological 90% mark once again, with last week's results showing refineries running at only 89.6%.