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Crude Oil Inventory Buildup Erases Crude Oil Gains

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Dec. 4 2020, Updated 10:53 a.m. ET

Crude oil price movement

Below is our crude oil price and fundamental analysis. For an in-depth fundamental look at crude oil and related companies, sectors, and drivers, please refer to our Energy and Power page.

May WTI (West Texas Intermediate) crude oil futures lost more than 6% and settled at $50.42 per barrel on April 8, 2015. Crude oil prices erased the exponential gains in the last two days when massive inventory buildup data was released yesterday.

The carnage in the oil market saw oil tracking ETFs decline—like the ProShares Ultra DJ-UBS Crude Oil (UCO) and the United States Oil Fund LP (USO). USO and UCO fell by 5.19% and 10.32%, respectively, on April 8, 2015.

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Massive inventory build up

The weekly commercial crude oil inventory report was released by the EIA (U.S. Energy Information Administration) on April 8, 2015. Weekly crude oil inventories rose by 10.95 MMbbls (million barrels) against the market estimates of 3.42 MMbbls for the week ending April 3.

As expected, crude oil prices were beat down in yesterday’s trade. Crude oil inventories increased to 482.4 MMbbls for the week ending April 3, 2015. Inventories increased 2.3% week-over-week. They’re 25% above the figures last year. The rise in inventory supports oil and gas tanker stocks like Tesoro (TSO), Teekay Tankers (TNK), DHT Holdings (DHT), and Nordic American Tanker (NAT).

Crude oil resumed its long-term downward trend. It lost more than 4% YTD (year-to-date). Prices fell for the fifth time in the last ten days. Over this period, the average up days’ prices increased 1.32% more than the down days’ average. WTI crude oil was the worst performer compared to all of the other commodities. Nickel prices performed badly. They were close to crude oil. Yesterday, it lost 3.45% at the close of trade.

The Energy Select Sector SPDR ETF (XLE) and the SPDR Oil and Gas ETF (XOP) also followed crude oil’s footsteps. They fell by 2.92% and 0.81% at the end of trade.

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