Is the Market About to Have a Freak-Out Moment After Multiple Oil Inventory Draws?
For the third straight week, data from the U.S. Energy Information Administration showed that the amount of oil the country has in storage had fallen. Further, these declines have been much deeper than the market had expected. This week, for example, crude oil storage inventories fell 4.7 million barrels from last week. Not only was that better than the 3.2 million barrel inventory draw that analysts had expected, but it completely contradicted an earlier report by the American Petroleum Institute showing that crude inventories spiked by 1.6 million barrels this week.
That said, instead of applauding the news, oil traders shrugged, evidenced by the slight rise in the U.S. oil benchmark WTI, which edged up slightly more than 1% to around $47 per barrel. Oil traders had the same reaction yesterday after a report out of Saudi Arabia indicated that the country was considering cutting its oil exports by another 1 million barrels per day (bpd). While oil initially popped on the news, that rally didn't go very far because oil traders remain skeptical. That said, this skepticism could be lulling them into believing that we're in a go-nowhere market. Because of that, it's growing increasingly possible that oil traders could go into a frenzy if they get caught off-guard by an unexpected barrage of bullish news.
Image source: Getty Images.
Source: Fool.com
