Summary:
-
Crude oil inventories show large drop (-10.8M)
-
Draw down similar to API and 2nd largest this year
-
Oil rallies to daily highs but lacks clear direction since
The weekly crude oil inventories have shown a big drop in US stockpiles and sent the price of Oil up to its highest level of the week. In fact the print of -10.8M is the 2nd largest negative reading so far in 2019 but given that it is broadly in line with last night’s API equivalent it could be seen as not that much of a surprise.
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile app
The price of Oil jumped after the release but has since pulled back in typically volatile trade. The lasting impact of this release is yet to be seen on the market and the next few hours could be telling. Source: xStation
The components of the DOE report were as follows:
-
Crude oil inventories: -10.8M vs -4.2M exp. -3.1M prior
-
Gasoline: -0.2M vs -1.4M exp
-
Distillates: +0.6M vs -0.9M exp
-
Refinery: -1.3% vs 0.1% exp. -0.3% prior
-
Production: 11.3 Mbpd vs 12.0Mbpd prior
On the whole most the subcomponents are fairly mixed but the drop in production could be seen as supportive of the headline read and bullish for the price of Oil.
The market from the perspective of a daily chart looks like we could be at a turning point with price moving back to the 8 and 21 EMAs. These are currently in a negative orientation but not too far apart, so it would not take much upside for them to print a bullish cross. At times like these the trend is least clear so the risk is higher, but also the return is greater than usual if the next move is called correctly. The fact that price has moved above Tuesday’s high can also be seen as constructive with today’s low of 63.72 potentially seen as support. Today’s closing level could also be seen as key in determining were the market heads next.
Oil continues to oscillate around the 8/21 EMAs as the bulls attempt to wrestle control of the tape. The price action into tonight’s close could be telling going forward. Source: xStation
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
