Here we go again…
The price of oil is plunging.
For the first quarter of 2017 West Texas Intermediate (WTI) held a pretty stable range between $54 – 58 per barrel. Now it is back to the roller coaster that we have been on since mid-2014.
As I write this, WTI is struggling to hold $43 per barrel and is sinking like a rock.
This time though, I think the market is acting on some bad information. If not bad, then at the very least I think the information is incomplete.
I believe that this most recent drop in oil prices is not being caused by the actual fundamentals of supply and demand. Those fundamentals are actually improving the bullish case for oil – slowly, but steadily.
This recent oil price decline is more likely being caused by the market focusing not on the full picture, but rather on one stubbornly bearish detail:
The amount of oil held in storage in the United States…
Oil Is a Global Commodity
Every week traders, investors and oil industry participants heavily scrutinize one set of data. That data set involves the weekly movements in United States oil inventory levels.
This post was published at Wall Street Examiner on June 23, 2017.