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Oil traders have decided that this morning’s news on oil and gasoline inventories indicates a drop in supply and is therefore good for higher oil prices. U.S. benchmark West Texas Intermediate settled up 3.3% today to $40.83 a barrel.

I’m not convinced that the numbers show anything significant about the supply trend.

The report from the U.S. Energy Information Administration showed a 3.3 million barrel drawdown in gasoline inventories and a 1.4 million barrel increase in crude oil inventories last week. Crude inventories at Cushing, Oklahoma, the delivery point for futures traded on the NYMEX, fell by 1.1 million barrels.

Analysts had expected that the numbers from the Energy Information Administration would show a decrease in gasoline inventories of 300,000 barrels and a decline in crude inventories of 900,000 barrels.

What makes it so hard to find a trend in these numbers is the earlier than usual shift by refiners away from producing the gasoline-heavy summer blend and earlier than usual preparation for the switch to the heating-oil heavy winter blend. That transition means refiners are producing less gasoline than expected as of this date–hence the drop, possibly, in gasoline inventories–and also buying less crude because of the transition from the summer to winter blends. That transition requires shifts in equipment at refineries and refinery operators usually take advantage of this period to do routine seasonal maintenance at their plants.

So it is quite possible that the shift signaled by today’s numbers says a lot about the schedule for seasonal refinery operations and very little about the supply/demand balance in the oil market.

As of today bearish oil traders are looking for oil to fall to $35 a barrel. If oil were to climb to, say, $41 a barrel, I’d expect to see bearish traders close their positions, which would move oil priced higher. On the other hand, a failure to hold $40 a barrel would lead to an increase in bearish bets that would be large enough to put $38 in play.