Crude oil prices got a bit of a bounce this morning following the weekly Department of Energy report that showed an unexpected decline in inventories.  While traders were forecasting stockpiles to increase by 1.3 million barrels, they actually declined by 3.568 million.  That was the largest weekly decline since August and initially sent prices up by nearly 4% from their morning lows.  The bounce was short-lived, though, as traders quickly came to realize that crude oil inventories are still more than 45% above normal for this time of year and just 5 million barrels from a record high.  Furthermore, while expectations called for a build in stockpiles, it is more common for inventories to decline at this time of year than to increase, so that fact that there was a drawdown shouldn’t have been too surprising.

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