CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Unexpected build in DOE inventories but Oil bounces from 3-month lows

16:12 18 July 2018

Summary:

  • DOE inventories: +5.8M vs -3.4M exp and -12.6M prior
  • US oil production hits 11M 
  • Oil dips lower but finds some buyers near 3-month lows

The weekly DOE inventories has thrown up some surprising releases of late, and this afternoon’s didn’t disappoint with an unexpectedly large build. As well as the sharp increase in US stockpiles the US production topped 11M to set another record high, but despite some initial selling the price of Oil has found some buyers stepping in near its lowest level in since April. 

Start investing today or test a free demo

Open account Try demo Download mobile app Download mobile app

Looking at the release itself, the reading of +5.8M marked a sharp beat on the -3.4M expected and comes after last week saw a decline of 12.6M. Last night’s API showed a rise of 0.6M. The print itself is the joint highest since the beginning of May and could be seen to suggest that the recent run of declines, with 4 of the past 5 releases showing sizable drops, may be coming to an end. As well as the headline print there was the following readings int he components, written int he form of actual vs expected:

  • Distillate: -0.4M vs +1.2M
  • Cushing: -0.9M vs -2.1M (prior)
  • Gasoline: -3.2M vs -0.7M

These readings could be seen as mildly supportive of price with some larger than expected drops, but they pale into significance compared tot he headline really. Furthermore, US oil production increased further, hitting the 11M mark to extend the gains seen in recent years. 

link do file download link

 US Oil production extended its uptrend and breached the 11M mark last week. Source: Bloomberg

Overall there’s little to get excited about here for Oil bulls, although the price has jumped markedly higher since the release. These gains given the seemingly negative data could be seen as telling, with the last hours trade producing a large bullish engulfing candle. The lows around 71.20 could now be seen as important support with price presently testing the recent highs around 72.30. 

link do file download link

 Oil has jumped around 100 ticks since making a low of 71.23 just after the release. The positive reaction is surprising given the data itself and may reveal an underlying strength that the recent declines are over. Source: xStation 

We provided some further fundamental analysis on Oil in our commodity snapshot which can be found here. 

 

 

 

Disclaimer

This article is provided for general information purposes only. Any opinions, analyses, prices or other content is provided for educational purposes and does not constitute investment advice or a recommendation. Any research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Any information provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.

Start investing today or test a free demo

Open account Try demo Download mobile app Download mobile app

Past performance is not necessarily indicative of future results, and any person acting on this information does so entirely at their own risk, we do not accept liability for any loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.

Back
Xtb logo

Join over 1 Million investors from around the world

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 2 March 2024
adobe_unique_id cc 1 March 2025
test_cookie cc 1 March 2024
SESSID cc 9 September 2022
__hssc cc 1 March 2024
__cf_bm cc 1 March 2024
intercom-id-iojaybix cc 26 November 2024
intercom-session-iojaybix cc 8 March 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
_gid cc 9 September 2022
_gat_UA-22576382-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_ga_CBPL72L2EC cc 1 March 2026
_ga cc 1 March 2026
AnalyticsSyncHistory cc 8 October 2022
af_id cc 31 March 2025
afUserId cc 1 March 2026
af_id cc 1 March 2026
AF_SYNC cc 8 March 2024
__hstc cc 28 August 2024
__hssrc

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
MUID cc 26 March 2025
_omappvp cc 11 February 2035
_omappvs cc 1 March 2024
_uetsid cc 2 March 2024
_uetvid cc 26 March 2025
_fbp cc 30 May 2024
fr cc 7 December 2022
muc_ads cc 7 September 2024
lang
_ttp cc 26 March 2025
_tt_enable_cookie cc 26 March 2025
_ttp cc 26 March 2025
hubspotutk cc 28 August 2024

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description
personalization_id cc 7 September 2024
UserMatchHistory cc 8 October 2022
bcookie cc 8 September 2023
lidc cc 9 September 2022
lang
bscookie cc 8 September 2023
li_gc cc 7 March 2023

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language