Crude Continues to Fall Despite Drop in Inventory (USO) (OIL) (UCO)
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Crude-related investments such as United States Oil ETF (NYSE: USO) declined on Wednesday. The fall coincides with a $10 drop in the price of WTI, which tapped lows below $90 per barrel this morning. Brent also traded lower, though it has outperformed WTI over the past 5 trading sessions.
API data in the U.S. which showed a rise in crude stock piles of 900k barrels, less than expected. EIA data showed this morning showed a drop of 2.45 million barrels vs. a build of 1.9 million expected.
Oil is also reacting to the latest developments in Europe and a flare up of its 3-year old crisis, as violent protests hit Athens and Spanish with protestors clashing with police. Planned austerity is at the root of the recent EU troubles.
Many investors believe downside in crude oil is somewhat limited considering geopolitical tensions in the Middle East, which continue to support oil prices as Iran remains defiant in the face of EU sanctions and threats of military action. However, with July's $77 per barrel price still fresh, traders say the breakdown in crude may have room to run. Last time prices declined significantly, traders noted an increase in the amount of saber-rattling coming from Iran.
United States Oil ETF (NYSE: USO) is lower by 1.7 percent early on Wednesday. iPath S&P GSCI Crude Oil Total Return ETN (NYSE: OIL) is lower by a similar amount.
API data in the U.S. which showed a rise in crude stock piles of 900k barrels, less than expected. EIA data showed this morning showed a drop of 2.45 million barrels vs. a build of 1.9 million expected.
Oil is also reacting to the latest developments in Europe and a flare up of its 3-year old crisis, as violent protests hit Athens and Spanish with protestors clashing with police. Planned austerity is at the root of the recent EU troubles.
Many investors believe downside in crude oil is somewhat limited considering geopolitical tensions in the Middle East, which continue to support oil prices as Iran remains defiant in the face of EU sanctions and threats of military action. However, with July's $77 per barrel price still fresh, traders say the breakdown in crude may have room to run. Last time prices declined significantly, traders noted an increase in the amount of saber-rattling coming from Iran.
United States Oil ETF (NYSE: USO) is lower by 1.7 percent early on Wednesday. iPath S&P GSCI Crude Oil Total Return ETN (NYSE: OIL) is lower by a similar amount.
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