The recent market action in crude oil has left many traders, as well as the outside world, baffled.
Pete Mulmat dives into the crude oil futures, as the March CL contracts hit a low of $27.56 per barrel.
While the U.S. rig count has dropped, the market is responding negatively to increases in oil reserves, as output rose again over the past week.
Pete explains that the slide in prices is largely due to an expectation that inventories would be creeping lower, while actual numbers indicate the opposite.
Prices are slipping across the other petroleum products as well. Even though gasoline reserves rose, they are at similar levels to this time last year.
Domestic Oil production has edged higher, indicating an uptrend of growing production compared to the past few weeks.
Pete points out there has been a 62.3% drop in U.S. Oil rigs currently operating. Longer term this would be a bullish indicator for oil, but with week to week production numbers driving speculation to the downside.