This note is a guest contribution by Bespoke Investment Group.
Although US oil inventories declined by 475K barrels in the latest week, the decline was less than the forecasted decline of 700K barrels. As shown in the charts below, oil inventories in the US are currently right near their highest levels of the year relative to the historical average (bottom chart). Since oil stockpiles peaked earlier in the year, inventories have declined by 2% (blue line top chart). In the average year, however, oil stockpiles are down 6% from their seasonal high for the year (red line top chart).
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