Oil Higher as Inventory Drop (USO) (OIL) (UCO)

United States Oil Fund LP ETF (NYSE: USO) moved higher in early trading on Wednesday. EIA inventory data this morning showed that inventories fell by 4.7 million barrels last week. This was more than market expectations of 1.38 barrels. API data on Tuesday showed a weekly inventory drop of only 695k barrels.

United States Oil Fund LP ETF (NYSE: USO) is lower by nearly 18 percent in the past 30 days, inline with a decline in WTI crude which dropped to lows below $80 per barrel last month. Investors fear that weakening economic growth and decreasing global demand for oil will prove fatal for WTI and Brent futures.

The large drop in inventory is positive sign for oil prices, which up until now have found support mainly due to geopolitical concerns in Iran, which seem to flare up whenever oil prices drop.

WTI currently trades at just over $85 per barrel. USO trades at 33.02, higher by 1.6 percent.

Also, the iPath S&P GSCI Crude Oil TR Index ETN (NYSE: OIL) is up 1.6 percent on the session.

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