Crude oil breaks below the key $50 level as global demand is simply not keeping up with the oversupply of product in the system. EIA (Energy Administration Energy) data this week showed an unexpected increase in U.S. crude oil supplies. This is bearish because crude supplies normally fall at this time of year as refineries run at full capacity to keep up with summer driving demand. Peter Amandio, independent energy trader on the NYMEX trading floor, correctly predicted back in the first quarter that crude would trade to the $40 range this summer based on his long-term chart work and crude’s stretched fundamentals. Amandio tells TheStreet’s Jill Malandrino that while the picture was weak earlier in the year, there were a number of geopolitical events that kept crude higher, but eventually fundamentals took hold and it moved south.
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