Over the last 3 months oil prices climbed about 11% with crude marching higher on Tuesday before paring gains. The move halted a two quarter losing streak and gave oil bulls reason to celebrate.
But the party might be over before it really starts; gains may be fleeting after the market gets weekly inventory data on Wednesday.
Addision Armstrong of Tradition Energy tells us, "Wednesday's release of the weekly U.S. government inventory data is likely to show that crude supplies -- already 12 percent above the five-year average level -- probably grew by 3.5 million barrels." In other words supplies will increase – a bearish scenario for crude.
In fact, supplies are growing so quickly that storage facilities are brimming with more oil than they've had in 16 years. Combined with the strategic petroleum reserve, the nation now has 1.05 billion barrels of oil in storage.
To put that in perspective that’s enough oil to fuel roughly 44 million cars for a year.
So what lies ahead?