Crude oil is struggling even after the Energy Information Administration (EIA) reported the sixth drawdown in crude oil in a row and the fact that U.S. oil production dipped for the first time in 13 weeks. The bears argue that while we have seen declines they will have to be much larger to drain off excess supply.
Crude oil initially reacted negatively to the American Petroleum Institute report as it showed a surprising increase in U.S. oil supply. The market was expecting a draw and it hurt current thought that U.S. oil inventories had topped out. Yet, if you look at the Cushing Oklahoma delivery point we saw a larger than expected 882,000 barrel drop in supply. That sent mixed signals as did the oil product numbers.
When will the global oil market get in balance? It already has and according to the International Energy Agency, that process is accelerating. The global oil market has achieved so-called market balance but much work remains to reduce excess global oil supply.