US weekly crude oil inventories
According to an EIA (U.S. Energy Information Administration) report on December 21, 2016, US crude oil inventories rose 2.3 MMbbls (million barrels) for the week ended December 16, 2016. The market expected a fall of 2.5 MMbbls. In the previous week, inventories fell 2.6 MMbbls.
On Wednesday, December 21, 2016, the United States Oil ETF (USO) fell 1.5%, and the ProShares Ultra Bloomberg Crude Oil (UCO) fell 3.1% after the announcement of the crude oil inventories report. Crude oil prices (USO) react positively to a fall in inventory levels. The rise in inventories indicates that the supply glut situation is increasing. It adds more uncertainty to the movement of crude oil (UWTI) (BNO) (DWTI) prices.
Trump’s energy policy
In the past month, there’s been a huge rally in crude oil prices. President-elect Donald Trump’s energy policy could impact the fundamentals of energy fossil fuels. Trump’s stance on increasing crude oil and natural gas output could enhance the current supply glut situation. It could also lead to job creation in the United States (QQQ) (IVV). These factors are supporting the movement of crude oil prices. However, increasing crude oil inventories are adding uncertainty to crude oil movement.
In the next part of this series, we’ll analyze the performance of the Eurozone consumer confidence in December 2016.