Oil slumped 4% today after the Energy Information Administration (EIA) reported a higher than expected uptick in crude inventories. Distillate and gasoline stocks rose more than expected also.
Econompic shows the historical, imperfect, relationship between inventory and price below.
Obviously many factors are at play here, yet perhaps some traders missed another piece of new, more bullish, data.
Americans drove 2.3% more in July versus last year according to latest data from The Federal Highway Administration (FHA). As Carpe Diem points out, this was the largest increase in vehicle miles since January 2006.
Regardless of short-term issues, the longer-term US demand recovery story appears intact, unless of course August traffic data ends up showing some kind of reversal. In addition, demand from developing nations such as China continues to grow, as we’ve highlighted previously.