Oil prices have definitely been on a tear lately, but are losing ground today ahead of this week's inventory report, which is due out later this morning. Crude prices have dropped by $2.90 this morning, and are currently trading at $106.52.
So why exactly is the market selling off crude oil? Today's action is a result of anticipation over what we will see in this week's inventory report. Analysts are predicting that when the Department of Energy releases the current oil inventory report, we will see a rise of around 2.3 million barrels.
OK, I know what you are thinking. . . inventories have been rising for the past couple of months and prices have not been reacting. Well, that is true. In fact, if we do see a rise this week, it will mark nine out of past ten weeks where we have seen a rise in oil inventories. However, what makes this week a bit different is the fact that concerns over America's slowing economy have spiked once again, and possibly traders are going to start to focus more on the implications of a slowing U.S. economy.
Should we get a surprise this week, of course, this afternoon will be a much different story, but for now it looks like we are going to get some relief over the next few days from oil's recent rampage.
Here is a look at just how high and how fast oil has been moving lately:
After we get the official numbers later this morning we will update you on the results and how the market is reacting.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
Before the bell: Futures decline as oil falls sharply; GM's bankruptcy plan approved
Entrepreneur's Journal: Key steps for telesales success
The week in preview: Focus returns to earnings: Alcoa, Chevron, Family Dollar
