Today's Oil Report Is A Bad Sign For The Economy

Oil prices are way down after the Energy Department’s Wednesday supplies report fell short of expectations.

Brent is off -2.3%, while WTI has fallen -2.6%. Oil supplies fell by just -1.2% compared with -2.4% expected per Citi.

Oil markets guru Stephen Schork says it’s another sign the economy is stalling.

“The weakness that we are seeing is continuation selling, we’ve been in a bear market since the first of the month,” he told us.

He noted the DOE report also showed a large supply build in Cushing, Oklahoma — a key transmission point for shipping crude stocks — as well as a sharp build in gasoline supplies on the East Coast. Since that hit a low of -12% versus the five year average in the wake of Hurricane Sandy, regional gas supplies are now at a 7.5% surplus compared to the average.

The report was only the third negative draw this year, he said, and oil reserves remain near all-time highs.

“You can’t have inflation if you don’t have economic growth,” he said.

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