The Reason for Crude's Fall

Increasing crude oil inventories cased the fall?

On Monday Brent was down under $58, the Crude dropped more than 3% while WTI fell below $48 per barrel.

On Tuesday the oil fell to a new 12-month low. A reason for this is the developing concerns of an oil oversupply in the market. Another reason for the drawdown are the growing concerns about a possible global economic retraction.

There are also other reasons for the sudden fall, for example, increasing crude oil inventories and anticipated developments in shale production gave a bearish momentum to oil as well. But the main factor for the drop was strengthened by the general selloff in the markets.

Genscape said that inventories are increasing and that alone has increased concerns of moderate demand due to rising supply extension. Phil Flynn, an analyst at Price Futures Group in Chicago, according to Reuters said “The Cushing number came in higher than anticipated ... it's definitely pointing to the concern that there is more supply and demand is weakening,”  “The market is still very nervous about that.”