Oil pauses after inventory build

4:17 PM 26 September 2018

Summary:

  • EIA crude oil inventories: +1.9M vs -0.7M exp. -2.1M prior

  • Russia’s Novak and Trump comments on Iran

  • Oil moves off lows of the day and trades near 4-year peak

 

The US inventory figure for crude oil has shown a weekly increase for the first time in 6 weeks but given that the increase was below the private API number it has actually caused a move higher in the market, with Oil moving off its lows in the initial reaction. The EIA figure itself showed an increase of 1.9M, above the consensus forecast for a 0.7M fall and the prior reading of -2.1M. However, given that last night’s API release showed a build of 2.9M the number could be viewed as more mixed.

Start investing today or test a free demo

Open real account TRY DEMO Download mobile app Download mobile app

Oil has moved off its lows following the DOE release with the market holding support above 80.50. Last night’s API showed a larger build and even though price fell lower it soon recovered. Source: xStation

 

As always, in addition to the headline figure it is worth looking at the components of the report which are shown below in the format of actual vs expected unless otherwise stated.

 
  • Gasoline: +1.5M vs +0.7M

  • Distillates: -2.2M vs +0.3M

  • Refinery utilisation: -5.0% vs -1.0%

  • Production 11.1 mbpd vs 11.0 mbpd prior


The decline is distillates here is a bit unexpected and could be seen as positive for price while the further increase in production has seen output hit its highest level in several decades.

 

Around the same time as the release Russia’s Novak has made some comments on the oil market. Novak says that the country can increase their oil output but that they won’t necessarily do it. This is interesting to the point that OPEC+ just last weekend said that they will keep their output at present levels and it further reaffirms the notion that the group has the ability to raise supply should they wish - but at present it appears that they don’t.  

 

Not long afterwards US president Trump said once more that the US will pursue sanctions against Iran. Trump said again that the sanctions will be applied from November and these sanctions will be tougher than ever before. In a rather comical twist earlier, Bijan Zanganeh, Iran’s Oil minister pointed out that Trump’s interference in the MIddle East is one of the main reasons for the recent gains. “Mr Trump is trying to seriously reduce exports of Iran’s oil and also ensure the price of oil does not go up, but these two cannot happen together,” Zanganeh said, according to the Iranian Students’ News Agency.

The longer term outlook for Oil remains positive but given the recent strong gains the market appears to be pausing somewhat. Recent highs of 81.80 remain possible resistance while the breakout level from 80.50 could provide support. On a closing basis 79.75 is another level to look to and unless the market closes back below there then the breakout remains valid. Source: xStation  

 

Share:
Back
Xtb logo

Join over 1 000 000 XTB Group Clients from around the world

The financial instruments we offer, especially CFDs, can be highly risky. Fractional Shares (FS) is an acquired from XTB fiduciary right to fractional parts of stocks and ETFs. FS are not a separate financial instrument. The limited corporate rights are associated with FS.
This page was not created for investors residing in Brazil. This brokerage is not authorized by the Comissão de Valores Mobiliários (CVM) or the Brazilian Central Bank (BCB). The content of this page should not be characterized as an investment offer in Brazil or for investors residing in that country.
Losses can exceed deposits

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 10 October 2024
test_cookie cc 25 January 2024
adobe_unique_id cc 9 October 2025
__hssc cc 9 October 2024
SESSID cc 2 March 2024
__cf_bm cc 9 October 2024
intercom-id-iojaybix cc 6 July 2025
intercom-session-iojaybix cc 16 October 2024
xtbCookiesSettings cc 9 October 2025
TS5b68a4e1027
countryIsoCode
xtbLanguageSettings cc 9 October 2025
userPreviousBranchSymbol cc 9 October 2025
TS5b68a4e1027
intercom-device-id-iojaybix cc 6 July 2025

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-98728395-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_gcl_au cc 7 January 2025
_ga_CBPL72L2EC cc 9 October 2026
_ga cc 9 October 2026
__hstc cc 7 April 2025
__hssrc
_vwo_uuid_v2 cc 10 October 2025
_ga_TC79BEJ20L cc 9 October 2026
_vwo_uuid cc 9 October 2025
_vwo_ds cc 8 November 2024
_vwo_sn cc 9 October 2024
_vis_opt_s cc 17 January 2025
_vis_opt_test_cookie

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 3 November 2025
_omappvp cc 21 September 2035
_omappvs cc 9 October 2024
_uetsid cc 10 October 2024
_uetvid cc 3 November 2025
_fbp cc 7 January 2025
fr cc 7 December 2022
_ttp cc 3 November 2025
_tt_enable_cookie cc 3 November 2025
_ttp cc 3 November 2025
hubspotutk cc 7 April 2025
IDE cc 3 November 2025
YSC
VISITOR_INFO1_LIVE cc 7 April 2025
MUID cc 3 November 2025

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

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