Crude Oil Smashed as Inventory Shows Surprise Build (USO) (OIL) (UCO)

United States Oil ETF (NYSE: USO) is trading lower early on Wednesday after a report by the EIA showed a surprisingly large build up in inventory last week. Crude Inventories rose 8.53 million barrels versus the consensus of a 1 million barrel build. API data yesterday showed a build of 2.4 million barrels.

WTI and Brent futures are both trading lower in response to the report. After briefly tapping $100 per barrel last Friday, WTI is trading below $93 per barrel. Brent trades below $109 per barrel, off recent highs near $118.

Earlier this week, oil markets were hit by volatility that some say reminded them of the "flash crash" in equity markets. In light of the unusual build in inventory reported today, speculation about the cause of the spike and its relationship to the inventory buildup is fueling talk in trading circles.

Overall, traders are mindful of an increasingly bearish tone in energy markets. However, ongoing geopolitical tensions in the Middle East could limit the downside.

United States Oil ETF (NYSE: USO) is lower by 3.3 percent.

iPath S&P GSCI Crude Oil Total Return ETF (NYSE: OIL) is lower by 3 percent.

ProShares Ultra DJ-UBS Crude Oil (NYSE: UCO) is lower by 6.2 percent.

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