Just when you thought the oil rout couldn't get any worse, it did. Heading into this week, crude prices were already under pressure after the OPEC+ alliance gave ominous signals about potentially boosting supplied into an oversupplied market. Then came the weekly inventory data bomb that really set off panic selling.
The American Petroleum Institute reported a massive surprise build of 4 million barrels for crude stockpiles last week. As if that wasn't enough, gasoline inventories also ballooned by 4 million barrels versus projections for a 2 million barrel rise. The shocker crossed key technical levels, with WTI crashing below $73 to trade at the lowest levels since December.
The selloff underscores heightened fears over waning fuel demand as the U.S. driving season gets underway - not exactly an encouraging sign for the summer. Some now see WTI potentially revisiting December's $70 lows. While others view this as a classic bull trap that will be quickly reversed if warmer months bring rising gasoline demand as expected.
With so much uncertainty over the global growth outlook, the countdown is now on for the more widely-followed inventory data from the U.S. Energy Department later today. Will it confirm these supply/demand imbalances? Or pull the rug out from the new Oil Bears?
