US crude oil inventory
According to a report published by the EIA (U.S. Energy Information Administration) on Wednesday, April 20, 2016, the US (SPY) (VOO) (SPXL) crude oil inventory rose by 2.1 million barrels for the week ending April 15, 2016. This was slightly below Market expectations. Crude oil prices rose nearly 3.2% on the day due to a less-than-expected rise in the US crude oil inventory. The US crude oil (USO) (UCO) (UWTI) inventory had increased by 6.6 million barrels in the week ending April 8. The rise in inventory hampered crude oil price movement. Read US Crude Oil Stockpiles Rose: Will Crude Oil Lose More Ground? to learn more about last week’s crude oil inventory report.
Doha meeting fails, investors focus on another meeting of oil producers
According to Iraq’s deputy oil minister, major oil producers will meet in Russia, most likely in May 2016, to discuss the crude oil output freeze. However, Russia’s (RSX) (ERUS) energy minister said that no meeting has been scheduled for oil producers in Russia.
As the Doha meeting failed to lead to an agreement to freeze crude oil production, investor sentiment led to panic regarding the future movement of crude oil prices. Saudi Arabia, one of the leading producers and exporters of crude oil, wanted Iran to agree to the production freeze. As Iran backed out of the production freeze talks at the last minute, the meeting failed to meet investors’ expectations. Crude oil price movement depends on the next steps taken by major crude oil producers.
In the next part of this series, we’ll analyze the performance of the US manufacturing PMI in April.