US Crude Oil Inventories Rose: What It Could Mean for Oil Prices

According to the EIA’s (Energy Information Administration) report on February 15, 2017, US crude oil inventories rose 9.5 MMbbls (million barrels) in the week ended February 10, 2017, as compared to the expected rise of 3.5 MMbbls and a rise of 13.8 MMbbls the previous week.

On February 15, 2017, the United States Oil Fund (USO) fell 0.1%, and the ProShares Ultra Bloomberg Crude Oil ETF (UCO) fell 0.3% 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.

Crude oil prices traded within a narrow range in the last week. With the expectation of more production cuts from OPEC (Organization of Petroleum Exporting Countries), crude oil prices are trading in a narrow range. Inventories are rising more than market expectations, which is increasing concern in investors’ minds about whether it could lead to a supply glut in the economy (QQQ).

In the next part of this series, we’ll analyze Eurozone industrial production in December 2016.