Crude inventories remain sturdy, despite today's unexpected drop.

Despite the surprise 1.3 million-barrel drop in DOE crude stocks for last week, inventories in the market remain near April 1999 highs.

Refinery utilization still remains very weak, with refineries still lagging in their recovery from an aggressive March maintenance schedule.

For nearly five straight weeks, the EIA stock report has now surprised the market with inventory numbers on the upside. As a result, prices for crude especially will revert to the lower numbers seen in December.

The drawdown in crude inventories came at a time when refinery utilization remained low due to scheduled maintenance shutdowns.

We have high crude prices. We have low inventories. We have strong demand. All of that would be a recipe for a taut market even with refineries (running at full capacity).