A big surprise party was thrown by the U.S. Energy Department this morning when its weekly petroleum inventory report was released. Bears, rather than the bulls, did most of the celebrating, however.

If you watched the overnight price trend in U.S. crude oil futures, you could see traders' mindset changing as they approached the time for the Energy Department's weekly inventory report. Prices have been well-bid and rising after Tuesday's higher close and a broad consensus among analysts and industry insiders for an impending drawdown in crude oil stocks.

Crude oil supplies continue to be worked off, but the domestic stash of distillate products is ballooning. That came as a surprise to the folks at the American Petroleum Institute.

Tomorrow, the Energy Information Administration, the statistical arm of the U.S. Energy Department, will release its much-watched weekly inventory report. Today, traders will jockey to square their books ahead of the report, guided by goings-on in the trading venues and the industry-supported American Petroleum Institute's inventory estimates.

Fundamentals are lining up for a continued pinch on oil refiners' margins. This morning's U.S. Energy Department inventory report showed a substantial drawdown in crude oil supplies and modest, though surprising, builds in refined products.