Thursday, May 23, 2013

Oil’s Underperformance Signals Much Lower Prices When Stocks Correct

We take a look at the latest developments in the oil market, including charts of all the major inventory categories.

The Department of Energy reported this morning that in the week ending May 17, U.S. crude oil inventories decreased by 0.3 million barrels, gasoline inventories increased by 3 million barrels, distillate inventories decreased by 1.1 million barrels and total petroleum inventories increased by 4.2 million barrels.



Crude oil sold off after the release of the latest inventory figures. Brent’s shallow uptrend continues to look unconvincing. For one—fundamentals remain weak as they have all year. Demand growth is tepid and supply growth is robust.

Moreover, though it’s rallied since bottoming in mid-April, oil has significantly underperformed stock markets, which are at multiyear (Europe, Asia) or all-time highs (U.S.). (more)Please share this article

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