One of the advantages of publishing this newsletter on Wednesdays is that it affords us a chance to squeeze in news from the US Energy Information Administration’s Weekly Petroleum Status Report, the most comprehensive assessment of the domestic oil market.

As reported in the last issue, one reason domestic prices ran up so sharply, even relative to global levels, were two successive huge drawdowns of US inventories, as Gulf refiners running nearly all out  cut down on imports by dipping into the region’s ample stocks of stored crude.

The data reported since has hardly been bearish. Today’s featured another sizable decline (of 2.8 million barrels for last week) in commercial crude inventories, and a 1.4 million barrel drop for gasoline.

Some of this was attributable to stepped up exports and the stockpiling of fuel ahead of fall maintenance. But it’s also worth noting that the EIA’s fuel supplied data, a proxy for demand, continued to run 4 percent above the year-ago levels, and that while gasoline inventories remain sky-high, those of jet fuel are unusually low and distillate demand in general has been strong.

None of it mattered Wednesday, though, as the recent spike in crude prices continued to reverse. On Valero Energy’s (NYSE: VLO) conference call yesterday, management predicted that domestic crude would soon trade at a wider discount to the global benchmark Brent, providing some relief to the squeezed margins of domestic refiners. That didn’t do much for the shares of refiners, which continued to drift near recent lows. Meanwhile, the stocks of oil drillers took their lumps. Like crude prices, they’ve been overdue for some profit-taking.