Oil? I don't see no fundamentals at play here

DOE released oil inventory numbers today and it is bearish all around with inventories in crude, gasoline and distillates all up substantially. As of now crude is hanging in there but refined products are down - despite a pretty big rally in stocks and USD taking further pounding.

How the hell is crude at $70 when demand is just not there? keep in mind that crude was around 25 bucks as of end of 1999 when the economy was booming. Has EM demand increased that much (maybe it has)? Because as you see below, US demand hasn't gone anywhere (although this probably isn't the best measure of inventory as implied demand is backed out from inventory changess).



And inventory is still sky high:


People say industrial production/manufacturing is rebounding but distillate inventory keeps piling on.




Now, it is entirely possible that distillate buildup was due to refiners taking advantage of very generous crack spread lately. To me, interesting trades are to be made in cracks. I have no idea whether oil should be at 60,70 or 80. Personally I am inclined to short but don't want to get caught on a wrong side of a directional trade in this market.

gasoline crack: