On February 13th, the weekly U.S. API Crude oil stock inventory numbers were released. This report tracks the number of barrels of crude oil that the United States is holding in inventories. If the number of barrels for oil increases more than expected the market is seemingly bearish towards oil as less is being consumed, if there are less barrels than expected in inventory then the market is bullish and oil is being consumed. This weekly report allows a little glimpse into economic activity, if large stockpiles are seen then we obviously see less demand for oil, but we may also see less demand in economic growth as a whole. API is America's largest U.S trade association holding high power over the commodities market and the financial markets.
In the previous week This week marked the highest jump in crude barrel inventory since mid November of 2023. The market expected about 2.6M in inventory, but API released that there were 8.52M barrels. This immediately is a sign that the commodities market is cooling down, but a jump this high may be a sign of an economic downturn, and is something I’m sure financial analysts and commodities traders have taken note of.
This may be due to the ongoing conflicts between Russia and Ukraine, and Israel and Palestine. People are fearing the United State’s ability to continue trade for oil with the many conflicts ongoing in the area.
https://tradingeconomics.com/united-states/api-crude-oil-stock-change
https://www.investing.com/economic-calendar/api-weekly-crude-stock-656
https://www.fxstreet.com/economic-calendar/event/bcf389bd-5fe2-4bd1-b1e0-d0b3910ba944#fxs_home
ReplyDeleteI agree with Tim that a merger between Capital One and Discover may be bad for consumers and create a monopolistic situation. A merged Capital One has less incentive to offer deals to consumers and could potentially raise their fees since they are the giant among credit card companies.
Hi Trip, I think it’s really important to take note of changes in these leading indicators. I am, however, curious to know how good of a predictor these barrel counts are? Is this a “we need to do something about this now” situation? Or a “hmm, I don’t love that number” kind of thing? Or even, is it good because the Fed is trying to cool off the economy?
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