For the first time in nine weeks, US crude inventory grew less than expected, although still reaching a new modern day record of 383mmbbl and still growing rather than starting its typical seasonal decline. While gasoline inventory saw another sharp draw, also a contra-seasonal movement and coming just ahead of the start of the US driving season. Implied gasoline demand fell sharply, declining 0.3mmb/d WoW (-3.8%) and dropping off the bottom of the prior five-year range. All product demand fell 0.3mmb/d WoW (-1.7%) but the overall 52-week cumulative YoY decline eased marginally again to -2.8%. Product imports saw sharply contrasting moves, with gasoline imports plunging 14.8% WoW and by 60.3% YoY while distillate imports jumped 53.1% WoW and 20.4% YoY. We believe that this reflects refiners’ ongoing desire to work down days forward cover (DFC) in gasoline in anticipation of a weak driving season while addressing the tightness in distillate DFC that has developed recently. Overall, this looked like a fairly neutral set of numbers to us but Brent is down almost USD 3/bbl on the day (at 23:00 Moscow/20:00 BST) and WTI has tested the USD 90/bbl mark. Brent has now lost all the surge in price it put on from the end of last year as a result of Iranian sabre rattling. Ironically, the current impetus for this latest weakness is the potential prospect of a deal between the P5+1 group and Iran that could dent market expectations of a significant loss of Iranian crude supply from the end of June. Should clear sight of a deal really emerge, we would expect further sharp downside in the Brent price.