Last week was a strong week for oil as Saudi Arabia made claims that it is ready to start working with other major oil producers to stabilize the market. However, in early trade this week, the price of the commodity is taking a dive, and for good reason. Production in the United States is up and China unleashed larger amounts of exports. Today, we’ll talk about both stories, how oil reacted to the news, and what binary options traders should be watching when trading the commodity moving forward.

US Rig Counts Climb Again!

One of the big stories that broke early this morning was the fact that US oil rig counts are up. According to recently released data, in the week ending August 19th, the total active oil rig count in the United States was up to 491. This is a gain of 10 active rigs from just one week earlier; marking the eighth consecutive week that we’ve seen gains in the amount of active oil rigs in the United States. This statistic underpins the fact that production of oil continues to rise despite declines in demand due to global economic concerns.

Exports Continue To Flood The Market

Another big story surrounding oil at the moment is the fact that exports are starting to get out of hand. One of the best pieces of evidence to this phenomena is the fact that Chinese oil exports are climbing dramatically. In fact, in July, diesel and gasoline exports out of China climbed by 181.8% and 145.2% respectively. This is a huge hit to oil. After all, when we see more exports of refined oil-based products, and demand isn’t growing, what we end up with is a large global supply glut.

Unfortunately, China isn’t the only area where we’re seeing increased exports. In fact, we’re seeing gains in other areas as well, like Iraq and Nigeria. As exports continue to climb and the supply glut becomes more concerning, we could see more big declines in the price of oil.

What We’re Seeing From Oil In The Market

As mentioned above, oil has had a strong run as of late. In fact, today’s declines in the price of the commodity are actually the movement that ends a 7 session bull run. Nonetheless, the commodity is falling today as concerns with regard to a growing supply glut take center stage. So far, oil is down by more than 3% and doesn’t look like it’s going to turn around at any point throughout the session.

What Binary Options Traders Should Be On The Watch For

When it comes to oil, there are two big stories that binary options traders should watch when trading the commodity. Those stories include…

• Stories With Regard To Supply – The first thing that binary options traders should be looking out for is stories with regard to supply. Stories coming out of Saudi Arabia with regard to their willingness to start working on supply. This can cause quite a bit of movement. However, any news with regard to supply can really move the price of oil, so watch these closely.
• Economic Stories – Another big factor that you want to watch is the global economy. In the US, some are expecting that interest rates might be increased. This could lead to more expensive oil around the world and further demand declines. Also, watch stories with regard to the economies of Europe and Asia as these stories can have a profound affect on perception with regard to demand for the commodity, causing big movements.