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Hansen: Crude continues to fall ahead of US inventory report

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Since last week’s US inventory report, the price of crude oil has been falling. That's because crude stocks rose by more than expected, explains Saxo’s Ole Hansen. 

The price has dropped further as the market focuses on this Wednesday's report. Hansen expects inventories to again be higher than anticipated but he says it's also important to look at gaseoline numbers which, until last week, had been rising. If the slowdown continues he believes it could alleviate some of the pressure from weaker demand.

A new pipeline between the WTI inventory hub Cushing in Oklahoma and Montreal in Canada could also help, he says.

Ole points out that contango in the market is now at its widest level in five months. Any change to high inventories could therefore have a positive impact on crude prices.