The United States Energy Information Agency released information today that sent the oil market tumbling yet again. While the report seemed positive overall, there was one piece of the report that drove fear into the hearts of investors, bringing oil to it's lowest price since august. Today, we'll talk about what we saw in the report, what we can expect to see from oil moving forward and how binary options traders can take advantage of the trends.

Information Announced By The EIA Today

As mentioned above, the US Energy Information Agency released a report today with regard to the crude oil build in the country. Overall, the report seemed positive as everyone is hoping that production will slow, which will allow prices to rise. The EIA said that last week, crude oil inventories rose by only 252,000 barrels. While that may seem like quite a bit, it came in well below consensus estimates. While the average estimate of additional crude inventories came in at 1.9 million, the number actually produced beat even the lowest estimate of 500,000. However, at this point, any build in crude oil inventories is bad news. Currently, the oil stockpile in the United States is sitting at 487.3 million barrels. That number is dangerously close to the record high of 490.9 barrels. So, while the report was better than expected, the problem is still far from solved. In a statement, Chris Jarvis, an analyst at Caprock Risk Management had the following to offer…

The data was moderately bullish as crude stocks built less than expected, driven by refinery utilization… [however, smaller stock builds are] unlikely to relieve the selling pressure on the oil markets with U.S. Stocks at record levels for this time of year and knocking on the all-time high set earlier in the year…”

How The Market Reacted To The News

As mentioned above, at this point, any build in oil inventories is a bad thing. As a result, the value of oil declined dramatically today. Ultimately, today's declines brought the value of the commodity below the crucial support level at $40 per barrel. This is the first time we've seen oil prices this low since August.

What We Can Expect To See Moving Forward

Moving forward, I don't have much by way of positive expectations from the price of oil in the foreseeable future. The reality is that while the crude oil build is slowing, it's still building. Ultimately, there is still far too much oil being produced and demand is still declining. While this trend continues, we can expect to see more declines ahead. With that said, I believe that the trend will continue. Demand is likely to continue falling as economic conditions around the world continue to prove to be less than par. On the other hand, supply is showing no signs of letting up.

How Binary Options Traders Can Take Advantage Of The Trends

Oil is likely to continue to fall, and that's opening a great opportunity up for binary options traders. Knowing that oil is likely to continue in the negative direction, binary options traders should be watching for solid put option opportunities. Purchasing put options will allow traders to ride the trends down to profits! Keep an eye on the latest economic news.

What Do You Think?

Where do you think oil is headed and why? Let us know your opinion in the comments below!

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