While Florida and the rest of the Gulf Coast deal with the aftermath of Hurricane Harvey and Irma and the energy markets assess the short-term demand destruction, in the bigger picture for energy, we are getting very bullish data in supply versus demand.
Although the EIA weekly report showed a larger-than-expected decline in crude oil inventories, the price of the commodity declined sharply after news that U.S. crude oil production increased. Thanks to these circumstances, light crude lost 1.62% and closed the day under important support. What does it mean for the black gold?
Since bottoming in early July, the energy sector ETF has rallied by about 5% to break meaningfully above its 50-day moving average for the first time since January. The ETF also was able to clear its eight-month descending trend line in the same area.