Once Again, Inventory Build Clobbers Crude Oil

NYMEX Crude Oil plunged from $53 to $51.38 in reaction to the news that Crude Oil inventories swelled by nearly 11 million barrels (MB) compared to expectations of +3.3 MB.

While the sell-off was acute, let's realize that the upmove from the April 1 low at $47.05 to yesterday's high at $54.13 amounted to a powerful 15% advance that was in need of a correction.

The correction was already in progress before the inventory report, which was exacerbated by the larger-than-expected build in supply.

Thus far, the weakness has corrected 38% of the entire prior upmove, with the 50% corrective plateau at 50.60.

Thus far, oil is undergoing a "normal" correction in the aftermath of a powerful advance.