Oil prices have crossed $50 per barrel in trading today as data released on Tuesday showed that U.S. crude inventories fell sharply last week. At last check, the United States Oil Fund LP (ETF) ($USO) was trading 1.44% higher.
On Tuesday, data showed that crude inventories in the U.S. dropped 5.1 million, double the expectations, to 536.8 million last week. All eyes are now on the Energy Information Administration (EIA) data, which is scheduled to be released in a short while from now. If the inventory data continues to be favorable, USO could continue to gain momentum. Supply outages, combined with declining production, has improved oil’s fundamentals. The question though is whether a sharp increase in price will lead to producers in the U.S. starting drilling again.