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US Crude Oil Inventories Rose: Will Prices Stop Rising?

Are Global Economic Indicators Causing Better Economic Sentiment?

(Continued from Prior Part)

US crude oil inventories

According to the EIA’s (U.S. Energy Information Administration) report on Wednesday, May 18, 2016, US crude oil inventories rose by 1.3 million barrels for the week ended May 13, 2016. That compares to a decline of 3.4 million barrels in the previous week. The Market expectation was a decline of 2.8 million barrels. The US crude oil tracking ETF (USO) fell 1.8% that day as inventory reports failed to meet Market expectations.

How will crude oil react?

The movement in crude oil (UCO) (UWTI) weakened on May 18, 2016. The crude oil inventory report released that day showed that inventories rose for the week ended May 13, 2016. The rise in inventories made investors nervous.

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The US (QQQ) (IVV) (IWM) CPI (Consumer Price Index) showed a huge improvement in April, beating Market expectations. The rise in inflation is a good sign that the Fed could hike the interest rate further.

On Wednesday, May 18, 2016, the Fed decided that if data will support it, then it will likely raise the interest rate in June. This statement strengthened the US dollar (UUP), which hampered the movement of crude oil. The future movement of crude oil will depend on inventory data, demand outlook of crude oil, and the Fed’s decision.

In the next part, we’ll analyze the performance of the US CPI for the month of April.

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