Gas inventories declined marginally. Oil stocks declined more than expected, but are still at the top end of historical ranges. A decline in active refinery capacity was also another factor. Crude topped out at $80.18 today before settling at $79.91. (The text of the EIA's weekly report can be found here ).

But as Steve Hargreaves at CNN says:



In its weekly inventory report Wednesday, the Energy Information Administration said crude stocks plunged by 7.1 million barrels last week.

There have been concerns that OPEC production cuts from earlier this year and rising demand for oil have diminished crude supplies worldwide.

Still, EIA said crude inventories in the United States remain above average for this time of year.

But traders are focusing on the fact that crude inventories are below last year. Plus they say that while summer driving season sparks big demand for gasoline, it's actually winter that sees the largest demand for crude as people worldwide use heating oil and power plants burn oil to provide electric heat.

"Crude stocks are not crazy high anymore," said Antoine Halff, head of energy research at Fimat in New York. "Plus, heating season is ahead of us."

As Robert said last week (and I think it's safe if I echo it again this week...):