Crude oil inventories rose
According to the EIA’s (Energy Information Administration) report on November 16, 2016, US crude oil inventories rose 5.3 MMbbls (million barrels) in the week ended November 11, 2016, as compared to the expected rise of 1.5 MMbbls and a rise of 2.4 MMbbls the previous week.
On November 16, 2016, the United States Oil Fund (USO) fell 1%, and the ProShares Ultra Bloomberg Crude Oil ETF (UCO) fell 2.5% after the announcement of the latest crude oil (UWTI) (BNO) inventories report. Crude oil prices react positively to any fall in inventory levels. The rise in inventories indicates that the supply glut position in the market is increasing, which adds more uncertainty to the movement of crude oil prices.
Trump’s energy policy
President-elect Donald Trump’s energy policy could impact energy fundamentals. Trump’s stance on increasing crude oil and natural gas output could enhance the current supply glut situation. It could also lead to higher job creation in the United States (VFINX) (SPY). Higher crude oil and natural gas production could increase the overall revenues of oil and gas companies operating in the United States. Read Trump’s Energy Policy: How Are Crude Oil Prices Reacting? to learn more about crude oil’s recent movement.
In the next part of this series, we’ll look at the performance of the US consumer sentiment index in November 2016.