Bearish Breakout in Crude Oil Explained!
Arslan Butt • 1 min read
During the Asian sessions, the crude oil continued to trade bearish. This is despite the fact that the EIA report showed a draw of 8.95 million barrels though it had been expected to be bullish. What's going on?
EIA Stockpiles Report
According to the Energy Information Administration (EIA) report, there was a draw of 8.95 million barrels for last week followed by a draw of 6.45 million barrels. The oil was supposed to gain based on the news, but it surprisingly fell to break below the bullish trend line.
API Stockpiles Report
In my previous update on crude oil, I mentioned the API report. As per the American Petroleum Institute report, the U.S. crude stocks dropped by 9.2 million barrels in the week 469.2 million. As we know, there is a correlation between API report and EIA report. This caused investors to continue to buy the crude oil before the actual release of EIA inventory data.
Priced In Market
Upon the release of EIA inventories, the prices fell sharply as the EIA inventories showed reported a drop of 8.95 million, less than 9.2 million. Thus, the "priced In" oil reversed its earlier gains.
For now, investors are advised to wait for the U.S. session because we have several economic events from the United State, which may impact the crude oil demand.