WTI Crude January orders were lower around 2% during afternoon trading on Wednesday as data released in the morning from the U.S. Energy Information Administration announced domestic inventories of crude dipped by over 2 million barrels from the previous week.

"Today's report to me didn't seem like a bullish report when you break it all down," Path Trading Partners chief market strategist Bob Iaccino said on CNBC's "Halftime Report" on Wednesday.

Iaccino believes people are focused too heavily on supply, and not enough on demand.

TST Recommends

"Even if the OPEC and non-OPEC members cut, demand is likely to fall. We need to see a kick-up in demand more than the IEA is anticipating," Iaccino explained.

The IEA increased its outlook for global oil demand for the remainder of 2016, and for 2017 due to updated estimates for Russian and Chinese demand. China has been building "strategic reserves, " and that could remove 500K barrels per day out of 2017, Iaccino noted.

"We need a kick-up in demand in order to maintain these prices. Otherwise we are falling again," he argued.