The U.S. stock market is in a drawdown but oil prices are firm anyway. This situation is happening ahead of expectations in a period where the dollar is stronger and a gasoline glut is here. These factors are applying a strong downward pressure on the U.S. stock market these days. Gasoline stocks are just raising and you will see a strong decrease in distillate inventories. These factors play an important role in the current decline that is occurring in the U.S. stock market, and we are going to analyze this situation a little bit deeper here, so read on.

Shrinking Inventories

The market was expecting that U.S. inventories shrank just last week, and this happened. Therefore, crude oil prices rose. However, a contraction in gains occurred due to an elevated stock of many fuel products. In fact, Brent crude rose to $42.95 per barrel on the famous ICE Futures exchange in London. In addition, the Brute crude was traded at $45.63 a barrel on the NY Mercantile Exchange. There is also a glut of gasoline and many other fuels today, though oil prices have been plummeting in the last couple of years.

An Important Report

The Energy Information Administration will be releasing the important U.S. petroleum report today to assess the levels of inventory and whether this current price rally has stirred up the players to increase output. This could delay the needed rebalancing in the important and still-oversupplied market, according to many analysts. The American Petroleum Institute has published a report showing that U.S. crude supplies decreased by 2.3 million barrels. In addition, the report showed a raise of 800,000 barres in gasoline stocks, and distillate inventories also decreased by 500,000 barrels. The market needs to play close attention at how distillate and gasoline stock levels will change.

Declining Oil Stocks is a Fact

Oil stocks have been declining for many weeks, and an additional crude drawdown will make for the important ninth consecutive decline in terms of weeks. In fact, U.S. stockpiles have felt by the amazing 1.7 million barrels just las week, according to many analysts who were surveyed by the famous Wall Street Journal. These analysts stated that a decline in gasoline inventories happened – 1000,000 barrels – and stocks of distillates rose just by 7000,000 barrels including diesel fuel. However, gasoline prices tend to rise in the summer-driving season all over America, but the huge inventories have not shrunk in any way.

Plunging Oil Prices

A lot of market watchers are afraid of a further drop in gasoline prices at the end of this summer, and this might happen because of a drop in demand. This will push refining margins as well as oil prices lower. Since the WSJ-Dollar Index has hit a seven-week high, this will put oil prices under pressure because of this strong dollar. As we can observe, many factors are playing an important role in the declining of the U.S. stock market today, and analysts have to pay close attention to these signals that the market is currently emitting.