Oil failed to sustain gains above $40/bbl on Friday, closing at just $39.75. Today is the third time in three weeks that WTI crude prices have found their way above the $40 mark, only to slip heading into the close. Despite a continual improvement in demand sentiments, markets are not yet convinced that a close over $40/bbl is justified.

Markets are closely watching refinery utilization, both as an indicator of crude oil demand and as a gauge of fuel demand. Fuel inventories have struggled to wind down all the inventory gains experienced recently, and diesel stocks posted their first withdrawal just last week. Falling inventories have only been made possible by a steep cut in refinery activity. If refiners resumed their 90%-95% utilization rates typical of this time of year, fuel inventories would go screaming higher. Falling below 70% utilization in April and May, refiners are slowing bringing activity back to normal, but usage remains below 75%.

With little news to move the markets, the oil complex is trading slightly higher. The market seems oddly peaceful, considering the tumultuous volatility over the past few months. Crude oil is trading at $40.04, a meager gain of 29 cents per gallon over Friday’s close.

Fuel prices are also gently drifting upwards. Diesel is trading at $1.2193, a gain of 0.8 cents. Gasoline is currently trading at $1.2809, up 0.9 cents.