The numbers are truly impressive. The AAR counted 259,141 petroleum carloads last week. Just over a year ago, the count was just shy of 120,000 carloads for the comparable week. And that represented a rise of nearly 30% from the same week in 2011. Rail transportation of crude oil and petroleum products has nearly tripled in three years.

Coal shipments by rail still outnumber petroleum shipments by about eight to one, but coal carloads are down 5.6% year-to-date, compared with last year. And the number of carloads of grain has fallen 16% in the same period.

Among the railroads, the big winner is the Burlington Northern Santa Fe (BNSF), which is owned by Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) and plies the rails along the northern tier, including the oil-producing states of North Dakota and Montana. Railroads that depend more heavily on coal shipments, like CSX Corp. (NYSE: CSX), Norfolk Southern Corp. (NYSE: NSC) and Union Pacific Corp. (NYSE: UNP), have all experienced double-digit percentage drops in coal ships, weighing on revenues and profits.

Today Finland’s Neste Oil Oyj, the country’s only refiner, also was asked to provide information to the investigators.

At issue is the manner in which oil prices are reported to Platts and the way Platts then calculates the spot price of crude. The process is very similar to the way that Libor rates were generated: oil traders report price data on physical transactions to Platts, from which the pricing energy whips up a spot price. As with Libor rate setting, reporting is voluntary and it is easy for traders to hide the actual prices paid for crude. Platts could reject a price that it believes is false.

This is a big deal because the crude market trades about $3.4 trillion in oil every year. The companies that already have been asked for information are likely just the tip of the iceberg. Every oil market participant deals with every other participant, and it is very likely to lead to a much wider investigation as the EC trolls through the documents it has gathered already.

The lack of transparency in setting the spot price of crude could be repaired by requiring traders to report actual transaction data in the same way equities traders now do. Oil traders have resisted any such effort in the past, most recently last September.

But this latest probe, because it seeks information from more companies, could stiffen the spines of regulators that have been reluctant to face down the big oil traders.

The EIA reported that U.S. working stocks of natural gas totaled 1.96 trillion cubic feet, about 83 billion cubic feet lower than the five-year average of 2.05 trillion cubic feet. Working gas in storage totaled 2.66 trillion cubic feet for the same period a year ago. Natural gas inventories are roughly in the middle of the five-year range.

Recent mild weather over most of the country has diminished demand for natural gas in the past couple of weeks. The forecast for the next week calls for above-normal temperatures across most of the country, except along the Gulf Coast and the northern tier of stages from Washington to the Midwest. Natural gas futures dropped as low as $3.89 per million BTUs last week, after reaching a peak of $4.44 on May 1.

Here’s how stocks of the largest U.S. natural gas producers are reacting to today’s report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, is down 0.4%, at $90.84 in a 52-week range of $77.13 to $93.67.

Chesapeake Energy Corp. (NYSE: CHK) is down 2.6%, at $20.11 in a 52-week range of $13.32 to $22.97. Chesapeake’s share drop is largely due to a downgrade to Neutral from J.P. Morgan.

EOG Resources Inc. (NYSE: EOG) is down about 0.9%, at $133.53 in a 52-week range of $82.48 to $139.00.

The U.S. Natural Gas Fund (NYSEMKT: UNG) is down 2.9%, at $21.36 in a 52-week range of $15.18 to $24.09. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is up fractionally, at $44.31 in a 52-week range of $32.54 to $45.12. The first fund tracks spot prices; the second includes major drillers and services companies.

Total gasoline inventories increased by 2.6 million barrels last week and have moved into the upper half of the five-year average range. Total motor gasoline supplied averaged 8.5 million barrels a day over the past four weeks — a drop of about 3.1% compared with the same period a year ago.

Distillate inventories rose by 2.3 million barrels last week and remain in the lower half of the average range. Distillate product supplied averaged more than 3.6 million barrels a day over the past four weeks, down about 3.1% when compared with the same period last year. Distillate production totaled 4.6 million barrels a day last week, higher by 100,000 barrels compared with the prior week.

The American Petroleum Institute last night reported an inventory build of 1.1 million barrels in crude supplies last week, together with a decrease of 480,000 barrels in gasoline supplies and a rise of 1.9 million barrels in distillate supplies. Platts estimated a build of 300,000 barrels in crude inventories, a drop of 800,000 barrels in gasoline inventories and a rise of 800,000 barrels in distillate inventories.

Crude prices were down about 1.4% before the EIA report at around $93.00 a barrel and fell to $92.66 shortly after the report was released.

For the past week, crude imports averaged more than 7.6 million barrels a day, up about 17,000 barrels a day from the previous week. Refineries were running at 88% of capacity, with daily input of 15.3 million barrels a day, about 73,000 barrels a day more than the previous week.

The drop in crude oil inventories combined with the sharp rise in gasoline inventories signals that gasoline demand is down and that gasoline prices will follow. Crude prices will follow gasoline prices downward. This should be no surprise to anyone who has paid attention. Consumption (as measured by product supplied) is down another 3.1% this week. U.S. consumers are catching a break ahead of the summer driving season.

The United States Oil ETF (NYSEMKT: USO) is down 2.1%, at $32.86 in a 52-week range of $29.02 to $37.17.

The United States Gasoline ETF (NYSEMKT: UGA) is down 1.6%, at $55.39, in a 52-week range of $45.13 to $65.86.

The United States Brent Oil ETF (NYSEMKT: BNO) is down 1.2%, at $77.06 in a 52-week range of $63.00 to $88.71.

That message has not been lost on oil traders, who are pushing down their bids on both West Texas Intermediate (WTI) and Brent crude by about 1% this morning. This morning’s report that China’s industrial output grew by a lower-than-expected 9.3% is likely the immediate cause of the drop. Economists were expecting a 9.4% rise.

The connection between economic growth and demand for crude is pretty much a given, so the drop in crude prices following China’s report is no surprise. What is surprising, perhaps, is that money managers have increased their net-long positions in WTI.

According to last Friday’s Commitment of Traders report from the U.S. Commodities Futures Trading Commission (CFTC), net-long positions among money managers rose 5.5%. The thinking has to be that the WTI market, which is currently backwardated (near-term prices are higher than futures prices), will shift to contango to match the current contango in the market for Dated Brent.

It is equally likely that Brent prices will soften due to the rising supply of gasoline in Europe. The rise in gasoline inventories is due almost entirely to lower demand and there is little indication that demand will increase. That will push down the price of gasoline and the price of crude will follow.

The WTI market could easily move to contango, but the whole curve will move downward, pulling Brent prices down at the same time.

But the cartel did revise downward its demand projections for the first quarter based on actual data. In its April report, OPEC forecast global demand of 89.7 million barrels a day. The May report cuts that to 89 million barrels a day in the first quarter. But OPEC says:

The latter half of the year will see much higher oil use, reaching 90.1 mb/d and 90.9 mb/d in the third and fourth quarters, respectively. For the whole year, world oil demand growth is expected to increase by 0.8 mb/d to average 89.7 mb/d, unchanged from the previous assessment.

And that is the way the world goes around.

There is virtually no chance that OPEC’s forecast will hold up for the rest of this year. By its own admission, the projected 400,000 barrels a day of increased demand from China is quite shaky. And that is half the total projected increase in demand for 2013. Demand in the Middle East is forecast to grow by 300,000 barrels a day, but lower demand in Europe and Asia Pacific more than offset Middle Eastern demand.

Non-OPEC crude oil supply is expected to rise by an average of 980,000 barrels a day in 2013, reflecting a rise of 20,000 barrels a day from last month’s report to a total of 53.96 million barrels a day.

OPEC nations are forecast to produce an estimated 29.84 million barrels a day. In the first quarter of 2013, OPEC nations produced 30.22 million barrels a day, 38,000 more barrels per day than were demanded.

For 2013, the forecast for OPEC production has been cut by 400,000 barrels a day, and the cartel is still overproducing. Either OPEC will need to revise its quota (currently set at 30 million barrels a day) or one of the members will have to take one for the team. Saudi Arabia is the usual volunteer to raise or lower production, but we have noted before that it is in the Saudis’ best interests not to cut production but to let prices for OPEC crude fall.

Whatever OPEC’s strategy, it will have little impact on crude oil prices in the United States. Crude oil prices will continue to decline in the U.S. as the price of Brent falls and closes in on West Texas Intermediate (WTI) crude prices. There is nothing OPEC can do to change that.

The EIA reported that U.S. working stocks of natural gas totaled 1.87 trillion cubic feet, about 99 billion cubic feet lower than the five-year average of 1.96 trillion cubic feet. Working gas in storage totaled 2.6 trillion cubic feet for the same period a year ago.

Late season cool weather had little impact on inventories last week, as the spring weather began to warm. This week’s build is above the five-year average for the week of 69 billion cubic feet. Added to the warmer weather are concerns that speculative long positions on natural gas futures will lead to a sell-off, depressing prices even further. Heavy demand for summer cooling remains several weeks away.

Here’s how stocks of the largest U.S. natural gas producers are reacting to today’s report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, is down fractionally, at $91.02 in a 52-week range of $77.13 to $93.67.

Chesapeake Energy Corp. (NYSE: CHK) is up 0.8%, at $19.34 in a 52-week range of $13.32 to $22.97.

EOG Resources Inc. (NYSE: EOG) is down about 1%, at $136.50 in a 52-week range of $82.48 to $139.00.

The U.S. Natural Gas Fund (NYSEMKT: UNG) is down 1.5%, at $21.18 in a 52-week range of $15.18 to $24.09. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is down 1.1%, at $44.28 in a 52-week range of $32.54 to $45.12. The first fund tracks spot prices; the second includes major drillers and services companies.

The Xinhua news agency reports on China’s inflation in April:

China’s consumer inflation slightly accelerated in April, but still within a mild range that leaves room for policymakers to fine-tune policies to support the tepid economic recovery, official data showed Thursday.

China’s consumer price index (CPI), a main gauge of inflation, grew 2.4 percent year on year in April, up from 2.1 percent in March but well below the year’s control target of 3.5 percent, according to the National Bureau of Statistics (NBS).

The rise is largely in line with the market forecast of around 2.3 percent.

The NBS attributed the gain mainly to an unusual increase in vegetable prices during that month as low temperatures and scarce rainfalls disrupted supplies.

In April, food prices, which account for nearly one-third of weighting in China’s CPI, increased 4 percent year on year, with the prices of vegetables rising 5.9 percent, NBS data showed.

On a monthly basis, consumer prices in April edged up 0.2 percent.

Total gasoline inventories decreased by 900,000 barrels last week and remain in the middle of the five-year average range. Total motor gasoline supplied averaged more than 8.5 million barrels a day over the past four weeks — a drop of about 2.4% compared with the same period a year ago.

Distillate inventories rose by 1.8 million barrels last week, and remain in the lower half of the average range. Distillate product supplied averaged more than 3.6 million barrels a day over the past four weeks, down about 5.1% when compared with the same period of last year. Distillate production totaled 4.5 million barrels a day last week, higher by 200,000 barrels compared with the prior week.

The American Petroleum Institute last night reported an inventory build of 680,000 barrels in crude supplies last week, together with an decrease of 186,000 barrels in gasoline supplies and a rise of 1.1 million barrels in distillate supplies. Platts estimated a build of 1.9 million barrels in crude inventories, a drop of 750,000 barrels in gasoline inventories and a rise of 1 million barrels in distillate inventories.

Crude prices were up nearly 1% before the EIA report at around $96.50 a barrel and fell to $95.88 shortly after the report was released.

For the past week, crude imports averaged more than 7.6 million barrels a day, an decrease of about 560,000 barrels a day from the previous week. Refineries were running at 87% of capacity, with daily input of 15.2 million barrels a day, about 470,000 barrels a day more than the previous week.

Refining capacity utilization continues to rise as refiners increase runs now that maintenance work is virtually complete and demand for refined product exports remains firm. The much lower gain in crude inventories is a further indication that refineries are ramping up. Gasoline product supplied (which is EIA’s term for U.S. consumption) is down 2.4% year-over-year, another pointer to increased exports of gasoline.

The United States Oil ETF (NYSEMKT: USO) is up 0.5%, at $34.17 in a 52-week range of $29.02 to $27.17.

The United States Gasoline ETF (NYSEMKT: UGA) is up 0.1%, at $56.16, in a 52-week range of $45.13 to $65.86.

The United States Brent Oil ETF (NYSEMKT: BNO) is up 0.5%, at $79.33 in a 52-week range of $63.00 to $88.71.

Chesapeake will save $100 million in interest charges on the notes after redeeming them at par and refinancing the debt.

In the great scheme of Chesapeake’s efforts to reduce its debt burden, $100 million is not a huge amount, but the company needs every dime it can raise. Today’s ruling inches Chesapeake nearer to its debt-reduction goal.

Shares of Chesapeake are trading up 1.2% to $19.35 in the first half-hour of trading this morning, in a 52-week range of $13.32 to $22.97.