Why oil prices move up and down so much
On Wednesday, the U.S. Energy Information Administration reported that oil inventories are at historic highs — we’re running out of places to put the stuff. So, why, did oil prices… rise? And then, why did they fall again the next day?
A lot of factors can move the price of oil day to day, and they may or may not have anything to do with where the market is heading long term.
For instance, traders were not surprised when U.S. crude inventories hit a new high. And that is why prices went up, says Walter Zimmerman, chief technical analyst for United-ICAP.
"There’s an old proverb," Zimmerman says. "What everybody knows, is already in the price."
In other words, Wednesday's opening price of oil already included a discount for the over-supply that everybody expected to see.
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