Oil prices fell once again yesterday after starting the day higher, bringing this week’s total losses to upwards of $3/bbl. Added Iran pressures are causing some tailwinds for markets, but overcoming the bearish EIA report will be a challenge. Crude oil is trading at $55.49.

Fuel is following crude lower.  Diesel is trading at $1.8704, down 2.2 cents.  Gasoline is also lower trading at $1.8411, down 3.8 cents.

Iran has purportedly captured a vessel that was smuggling fuel, the same vessel which they claimed to have towed due to its emergency beacon being on. In response to the seizure, the US has deployed additional troops to Saudi Arabia to increase military presence in the region. Iran also reiterated their capability to shut down the Strait of Hormuz – through which 20% of all the world’s oil flows – though they noted such action would only be a last resort.

Yesterday’s EIA report demonstrated a bearish market outlook, with large fuel inventory builds despite summer demand. Crude did post a larger than expected draw, but the major focus has been on the products side.  Gasoline stocks grew 3.6 million barrels following a 0.5 MMbpd decline in demand versus last week. Refinery utilization continues creeping higher as refineries pump out fuels at full capacity, and with the exception of the East Coast, each region is over 95% of capacity. PADD 2 (Midwest) is over 97% utilization, signaling strong fuel supplies and inventories in the US.