How does U.S. crude oil inventory affect oil prices?
Investors who have invested in crude oil know that there will be news about crude oil inventory data regularly released by the United States every week. So, what impact does the U.S. crude oil inventory data have on the crude oil price trend? Let me tell you.
The U.S. crude oil inventory data is regarded as a guide to the trend of crude oil prices.
The American Energy Information Association (EIA) is the energy information administration of the U.S. Department of energy, which is an official organization. At present, traders in the market and international authoritative energy consulting agencies all adopt the inventory data of EIA. The data is generally released once a week at 11:30 p.m. on Wednesdays (10:30 BST), which has a direct impact on the crude oil market.
When crude oil inventory increases, it indicates that there is an excess supply of crude oil in the market, leading to a drop in oil prices.
When crude oil inventory decreases, it indicates that there is strong demand for crude oil in the market, which leads to the rise of oil price.
The change in crude oil inventories actually reflects the attitude of the US government towards oil prices. If the strategic crude oil inventory increases significantly, it indicates that the U.S. government recognizes the oil price at that time, so it will increase the strategic inventory and seize the crude oil resources, which will intensify the contradiction between supply and demand and lead to the rise of oil price.
Therefore, it is not to say that with the increase of inventory, the oil price will definitely fall, and if the inventory decreases, the oil price will certainly rise. It can only be said that inventory is negatively correlated with oil prices in most cases.