Oil pops and then drops after inventory data

WTI crude sold hard after jump

A large drawdown in US crude oil supplies sparked a squeeze to $39.00 in WTI crude oil from $38.20 but shortly after it has fallen all the way to $37.70.

Some are citing the build in distillates (as I did after the report) but the big takeaway for me is the inability of oil to hold gains.

Crude hit a post-crisis low yesterday and then bounced to finish slightly higher. That was a warning sign for bears that a squeeze could be coming. Today with bullish inventory data was a perfect reason to buy or cover.

Yet after 15 minutes of gains, it was right back into the doldrums for oil. That's a powerful bearish signal.