NEW YORK (BestCredit.Net) -- Oil prices closed 2013 with markets under heavy pressure, but we are starting to see a turning point in commodities valuations that could be a harbinger of good things to come. Prices in West Texas Intermediate crude have risen to their highest levels in two weeks, driven largely by results in economic data. The numbers suggest positive growth signals for the US and its position as the world's biggest consumer of oil.
Some of the most recent examples can be seen in home construction figures, which just finished their best year since the 2007 sector peak. Additionally, the December industrial production showed gains for the fifth straight month, and employment figures have shown steady long-term improvements (with the exception of the downside non-farm payrolls miss seen earlier in January). This creates a bullish scenario for oil from the demand perspective, but there are reasons for bullishness on the supply side, as well.
Conspiring Bullish Events
In the U.S., crude inventories have fallen to their lowest levels since Q1 2012 (with crude stockpiles falling to 350 million barrels last week). Crude supplies have dropped by more than 40 million barrels in the last two months, which is the biggest decline seen in more than 30 years. An economic picture that is progressing at a time when oil supplies are dropping suggests that we could be seeing a bottom in energy markets. This creates a supportive scenario for ETFs like the United States Oil Fund (USO) but there is a strong case to be made for the oil stocks that have been sold-off in recent months, as well.