US crude oil inventories fell by 3.2 million barrels
According to the EIA (U.S. Energy Information Administration) report on June 8, 2016, US crude oil inventories fell by 3.2 million barrels for the week ended June 3, 2016, compared with a decline of 1.4 million barrels in the previous week. The market expectation was a decline of 2.7 million barrels. It beat the market expectation and is the third consecutive decline.
The United States Oil ETF (USO) rose 1.7%, and the ProShares Ultra Bloomberg Crude Oil ETF (UCO) rose 3.4% on June 8, 2016, as inventory reports met the market expectations. Crude oil prices rose above $50 per barrel due to the wildfires in Western Canada (EWC) threatening oil output, and the decline in US crude oil inventories. However, according to the report provided by the EIA, weekly US crude oil production rose marginally by 10,000 barrels per day for the week ended June 3, 2016.
Prices hit new highs in 2016
The shrinking crude oil inventories are a major factor driving crude oil prices. Prices hit new highs in 2016. The price of crude oil (BNO) (UWTI) recovered 93% by June 10, 2016, from its low of $26.11 on February 11, 2016. If crude oil inventories shrink further in the future, crude oil prices could rise. In the next part of this series, we’ll analyze Japan’s final GDP for the first quarter of 2016.