Oil remains under pressure after inventories; close to key support

7 November 2018

This content has been created by X-Trade Brokers Dom Maklerski S.A.

Summary:

  • Crude oil inventories: +5.8M vs +2.0M exp. +3.2M prior. API +7.8M

  • US production jumps to 11.6M bpd - highest on record

  • Oil drops back below $72 and near 11 week low. 70.40 key support

 

What had looked like a promising move higher in oil earlier has fizzled out and the gains look like they could now be set to turn to losses after the latest  inventory release showed another increase in US stockpiles. The price had spiked nearly 200 ticks off its recent lows on reports that Saudi Arabia and Russia were discussing delivering further supply cuts next year, but the DOE inventory release which also showed record US production has nipped the recovery in the bud for now. Turning to the release itself the following are shown in the format of actual vs expected unless otherwise stated:

 
  • DOE crude oil inventories: +5.8M vs +2.0M

  • Gasoline: +1.9M vs -1.7M

  • Distillates: -3.5M vs -2.0M

  • Cushing: +2.4M vs +1.9M last

  • US production: 11.6 mbd vs 11.3 mbpd

 

Even though the increase was smaller than the corresponding API release last night (+7.8M), it does still represent a 7th consecutive weekly rise and with the sizable jump higher in US production it’s not hard to see why the market has reacted negatively.

The push higher seen this morning has been erased since the inventory release with price back near its lowest level of the day 30 minutes after the DOE data dropped. Source: xStation  

The daily chart for Oil shows price is not that far from the August lows around 70.40 and this could be seen as a key support. If the market continues lower and drops below there then price will reach its lowest level in over 6 months. Source: xStation

 

This service is provided by X-Trade Brokers Dom Maklerski S.A. (X-Trade Brokers Brokerage House joint-stock company), with its registered office in Warsaw, at Ogrodowa 58, 00-876 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. X-Trade Brokers Dom Maklerski 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.

Tags:
Back