WTI Crude Oil Falls On Inventories Reports

Monday’s Columbus Day holiday delayed the weekly crude oil inventory cycle by one session. The API release came in Wednesday afternoon and the EIA number hit the wires a few minutes ago. Since last week’s yearly highs posted by November WTI futures, prices have fallen by more than $5.00 per barrel. Let’s take a look at the hard data and see where this market is headed.

Weekly Crude Oil Inventories Statistics

The weekly inventories are in and trade of WTI has been definitively bearish. Prices of November WTI futures have fallen $0.25 since the EIA release an hour ago. Here is a look at this week’s hard data:

Event                                   Previous     Projected      Actual

API Crude Oil Stocks           0.907M            NA              9.750M

EIA Crude Oil Stocks           7.975M         2.620M        5.987M

For the last month or so, conventional wisdom has told us that seasonality was due to drive oil supplies higher. It appears that this concept is beginning to take hold, with stocks-on-hand for October growing considerably.

Next week may be a different story. Hurricane Michael slammed into the Gulf Coast region, shutting down an estimated 40% of drilling rigs in the area. Don’t be surprised if we see lower stocks numbers and projections beginning next week.

November WTI Crude Oil Technicals

Bearish participation is dominating November WTI crude oil futures for the second day in a row. Prices are well off of yearly highs and $70.00 is rapidly coming into view.

Here are the key numbers to watch for the rest of the session:

• Resistance(1): Bollinger MP, $72.21
• Support(1): Daily SMA, $71.02

Overview: At press time, WTI is trading near the $71.25 handle, between daily support and resistance levels. In the event this market trades below $71.00, a return to $70.00 by Friday’s close is probable. Settlement below the Daily SMA ($71.02) today will prompt me to take a short-term bearish stance toward this market.