Crude Oil: A Surprising Increase in US Inventories

Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.

Trading positions

Natural Gas [NGG22] No new position justified on a risk/reward point of view.
RBOB Gasoline [RBH22] No new position justified on a risk/reward point of view.
WTI Crude Oil [CLH22] No new position justified on a risk/reward point of view.

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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.

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.