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Oil’s Slope of Hope Is Getting Less Slippery

Blastoff aborted. It seems to have been a fuel problem this time.

Now two years into a bear market, oil prices have failed to sustain a major rally once again. Rather than a further slide in demand, overzealous refiners are the likely cause. U.S. inventories of gasoline and distillates are nearly 10% and 6% higher than year-ago levels, respectively. Meanwhile, spring supply disruptions in Canada, Nigeria and elsewhere have lessened.

Crude prices had nearly doubled from early February to early June, with the U.S. benchmark approaching $52 a barrel before sinking by over $10 in less than two months. But there is reason to believe that the fourth time will be the charm. Fears that a rise in price will be swamped by a torrent of quick-turnaround shale production need to consider the orders of magnitude.

Much like the previous three bear-market rallies—the other two being a 35% jump from late August...