The most recent weekly U.S. Energy Department ("DOE") petroleum inventory assessment, issued Jan. 25, 2012 reported an increase in U.S. crude petroleum inventories.  U.S. crude oil inventories rose by 3.6 million barrels.  U.S. gasoline inventories fell slightly, down 390,000 barrels.  U.S. distillate product (diesel and heating oil) inventory decreased by 2.4 million barrels.  The increase in crude inventory was attributed to crude inputs and decreased refinery production.  U.S. Atlantic Coast distillate product inventory, including heating oil, declined by 1.2 million barrels during the period.  Current Atlantic Coast heating oil stock inventory levels are 22% below the current five year average.

DOE Report:

U.S. refinery operable utilization for the period ending Jan. 20, 2012 was reported at 82.2 percent, a slight decrease over the previous week's level.  Sunoco and ConocoPhillips announced plans to idle two Delaware County, Pennsylvania refineries by mid-summer of 2012.  Sunoco also announced it will close its Philadelphia refinery by July 2012 if a buyer for this refinery cannot be found before then.  These refineries are older facilities which rely on expensive sources of crude oil for processing.  The Philadelphia and Delaware refinery closures represent 50% of the refining capacity on the U.S. East Coast.  In addition, a joint venture refinery 'HOVENSA' in the U.S. Virgin Island has announced closure plans. This large refinery has been scaling back production due to its inability to compete with modern natural gas fuelled refineries in the U.S. Gulf Coast, India, China and the Middle East.

•  The European Union's summit meeting this week, its 17th summit meeting in two years, continues to struggle with the creation of the European Stability Mechanism (ESM), a 500 billion euro permanent bailout fund to become operational in July of 2012.  Some European countries, such as Greece, are balking at the 'fiscal compact treaty' designed to tighten fiscal budgets of member countries by the Union.

• Continued tensions exist between Iran and European countries over sanctions imposed by Europe related to Iran's domestic nuclear program.  Iran continues to suggest it will cut off shipping in the Strait of Hormuz in response to European trade sanctions.