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Gas traders wipe blood off trading floor with lost shirts.

Gasoline speculators were caught with their pants down this morning, and now they've lost their shirts.

In today's Crude Reality report, Bob van der Valk notes that the closely watched national inventories for gasoline from the Dept. of Energy (DOE) are higher than expected by a jaw-dropping 3.2 million barrels, suggesting that consumers continue to buy less gas while the oil industry continues to over-produce.

What's frightening is that today's inventory report shows that gasoline inventories are actually down 21 million barrels compared to this time last year ... and there is still too much gas.

Why is this "frightening?"

It's not because we care about the "poor suffering speculators" who are busy wiping the blood off the trading floor with the shirts of losing investors, rather, it is because the high inventories suggest that fewer people are driving (you don't commute when you are unemployed), and fewer businesses are shipping goods to suppliers (businesses that aren't selling product don't consumer fuel).

Yet despite all this bad news, and a likely drop in oil prices, the ugly truth is that gas prices are going to go up. See Mr. van der Valk's report to learn why.

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