The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning, showing that U.S. commercial crude inventories decreased by 4.7 million barrels last week, maintaining a total U.S. commercial crude inventory of 490.6 million barrels. The commercial crude inventory remained in the upper half of the average range for this time of year.

Tuesday evening the American Petroleum Institute (API) reported that crude inventories rose by 1.6 million barrels in the week ending July 14. API also reported gasoline supplies decreased by 5.5 million barrels and distillate inventories increased by 2.9 million barrels. For the same period, an S&P Global Platts survey of analysts had consensus estimates for a decrease of 3 million barrels in crude inventories, a decrease of 700,000 barrels in gasoline inventories, and a rise of 500,000 barrels in distillate stockpiles.

Total gasoline inventories decreased by 4.4 million barrels last week, according to the EIA, and remain in the upper half of the five-year average range. U.S. refineries produced about 10.1 million barrels of gasoline a day last week, down by about 400,000 barrels a day compared to the prior week. Total motor gasoline supplied (the agency’s proxy for demand) averaged about 9.7 million barrels a day for the past four weeks, down by 0.8% compared with the same period a year ago.

Platts oil futures editor Geoffrey Craig points out that the spread between the front-month contract and the second-month contract has narrowed to 19 cents in July. That is, a barrel of oil for August delivery is just 19 cents cheaper than a barrel purchased for September delivery. The spread on the six-month contract is $1.11.

Craig spells it out: “A narrowing contango removes the financial incentive for traders to store crude in Cushing and could force more barrels out of tank.” Contango refers to a market position where prices for nearby delivery are lower than prices for future-month delivery.

With no financial incentive to hold barrels in storage, this week’s decline in inventory levels makes sense. Now the question is, will this go on or is this week a one-time event? Stay tuned.

With little or no incentive to pay for storing oil until prices rise, traders are more likely to sell their barrels. If that happens on a broad scale, the market flips into what the industry calls backwardation, where prices for nearby delivery are higher than prices for future-month delivery. There has not been a prolonged period of backwardation in the crude market since October 2014, just after the steep drop in crude prices began.

Before the EIA report, benchmark West Texas Intermediate (WTI) crude for August delivery traded up about 0.6% at around $46.67 a barrel and jumped to around $47.05 (up 1.4%) shortly after the report’s release. WTI settled at $46.40 on Tuesday and opened at $46.25 Wednesday morning. The 52-week range on August futures is $42.06 to $58.30. Within half an hour, oil had given back all but about 15 cents of its gain.

Distillate inventories decreased by 2.1 million barrels last week and have moved near the upper limit of the average range for this time of year. Distillate product supplied averaged over 4.1 million barrels a day over the past four weeks, up by 9.9% compared with the same period last year. Distillate production averaged over 4.9 million barrels a day last week, down about 400,000 barrels a day compared with the prior week’s production.

For the past week, crude imports averaged 8 million barrels a day, up by about 386,000 barrels a day compared with the previous week. Refineries were running at 94% of capacity, with daily input averaging over 17.1 million barrels a day, about 125,000 barrels a day less than the previous week’s average. Analysts were looking for refinery usage of 95% for the week.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.268, up a penny from $2.258 a week ago and down 2.5 cents per gallon compared with the month-ago price. Last year at this time, a gallon of regular gasoline cost $2.201 on average in the United States.

Here is a look at how share prices for two blue-chip stocks and two exchange-traded funds reacted to this latest report.

Exxon Mobil Corp. (NYSE: XOM) traded down about 0.1% at $80.53 in a 52-week range of $79.26 to $95.55. Over the past 12 months, Exxon stock has traded down about 15%.

Chevron Corp. (NYSE: CVX) traded up less than 0.1%, at $103.71 in a 52-week range of $97.53 to $119.00. As of last night’s close, Chevron shares are down about 2% over the past 12 months.

The United States Oil ETF (NYSEMKT: USO) traded up about 0.8%, at $9.62 in a 52-week range of $8.65 to $12.00.

The VanEck Vectors Oil Services ETF (NYSEMKT: OIH) traded up about 0.9% at $25.47 in a 52-week range of $23.63 to $36.35.

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