Oil is trying hard to bottom near $50/barrel, but inventory build-ups keep getting in the way. Our pic-of-the-week shows weekly commercial crude oil inventories in the U.S. and they keep getting larger and larger. Crude in storage managed to post an all-time high of 425.6 million barrels last week. Not only does this extend the uptrend but it also represents a bounce well above the trend.
The current short-run supply imbalance will eventually be solved and prices will head higher, but it might take at least a couple of quarters. A retest of the recent lows in price doesn’t seem out of the question along the way.
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