Crude oil futures fall on trade war fears, inventory gains
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Once a week, the Energy Information Administration EIA how to trade in crude oil inventory us a glimpse into what the future demand for oil is going to be by releasing its Crude Oil Inventory numbers. Traders love this information because the amount of oil commercial firms have in inventory impacts the price of oil in a relatively predictable way.
The more oil commercial firms have in inventory, the less demand these firms will have for oil in the future how to trade in crude oil inventory the cheaper the price of oil will become. The less oil commercial firms have in how to trade in crude oil inventory, the more demand these firms will have for oil in the future and the more expensive the price of oil will become. The Crude Oil Inventories number reports the number of barrels of crude oil commercial firms have in inventory.
Commercial firms report their inventory levels to the Energy Information Administration on a weekly basis, but the EIA must still make some estimates to arrive at the final number. The Crude Oil Inventories number is especially important for shareholders in the nations largest oil companies.
When you see the Crude Oil Inventories number rising, it is a bad sign for oil companies and will typically have a negative impact on the price of their stocks because they tend to make more money when oil prices are high. When you see the Crude Oil Inventories number falling, it is a good sign for oil companies and will typically have a positive impact on the price of their stocks because they tend to make more money when oil prices are high.
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