Recently, oil prices hit their highest levels in 7 years. Despite this, we are witnessing a surprising increase in US inventories. Why is that?

Energy market updates

Crude oil retreated this morning in the pre-US trading session, after another volatile day on Thursday. It was followed by the weekly release of US inventory figures that surprised the market with an increase in stocks published by the Energy Information Administration (EIA). Meanwhile, market participants were expecting a drop close to 1 million barrels, which implies a slowdown in demand.

fxsoriginal

This imbalance has led to soaring prices for petroleum products and distillates, which will add pressure on households and businesses already struggling with higher levels of inflation. Also, as I mentioned in more detail on Wednesday, there are also geopolitical tensions in various regions carrying some uncertainty, which is an additional turbine to propel oil prices.

fxsoriginal

(Source: Investing.com)

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RBOB Gasoline (RBH22) Futures (March contract, daily chart)

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WTI Crude Oil (CLH22) Futures (March contract, daily chart)


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All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' employees and associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

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