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Oil spikes on massive inventory draw but US production rises again

15:02 20 March 2019

Summary:

  • Crude Oil inventories: -9.6M vs +0.6M exp

  • US production ticks higher once more: 12.1 Mbpd

  • Oil.WTI surges back near 2019 high

 

The main scheduled event of the week for Oil traders has seen a massive drawdown in the latest inventory release, but a further rise in US production has taken the shine off what otherwise appears to be a strongly supportive reading for the price of crude. The weekly EIA number came in at -9.6M against a consensus forecast of +0.6M. Last week saw a drop of 3.9M and now 3 out of the last 4 releases have shown sizable declines. The fall was also larger than last night’s API reading which delivered an unexpected decline of 2.1M.

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US Oil Inventories has dipped below the 5-year average after the latest weekly release. The current level is now approaching a similar level to that seen this time last year. Source: XTB Macrobond

 

In addition to the headline, the subcomponents of the release can determine how the market reacts to the data, and there was more good news on this front for Oil bulls, with large drops in Gasoline and Distillates. The readings specifically were:

 
  • Gasoline: -4.6M vs -2.5M exp

  • Distillates: -4.1M vs -1.5M exp    

  • Cushing: -0.5M  vs -0.7M (no expected)  

 

While these readings all appear good for the market, there was another increase in US production, which hit a new record high of 12.1 Mbpd, after a print of 12.0 Mbpd.

 

Oil.WTI is back near its 5-month highs after the data with a longer term head and shoulders still in play. 59.90 could be seen as possible resistance, 57.50 potential support. 8/21 EMAs still indicate an uptrend. 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.

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