The oil products that we use—such as gasoline, diesel, and heating oil—are all refined from crude oil. If the demand for these refined products increases, then the demand for crude oil as a raw material will also go up. So why are we not seeing this correlation? As a trader, it is important to note two things while analyzing crude oil prices. One is to monitor the crude oil supply in the market. The second is to track the trend in consumption of crude oil’s finished products. Let’s first have a look at both gasoline and distillates, and then move on to crude oil supplies. (Click to enlarge) The chart above shows that while the crude oil stockpiles were rising to new record highs in February and March, gasoline inventory was falling. Is this a noteworthy event? In order to understand the significance of the fall, let’s see the […]