EIA report

October has brought energy sellers to the crude oil market in droves. Values of December WTI futures have dropped consistently, falling $10 per barrel from early month highs. For the time being, it appears that regular builds in supply and subsiding geopolitical uncertainty has brought calm to global oil. Let’s dig into the coming inventories cycle and see if this week’s numbers are in line with recent trends.

What To Expect From This Week’s Crude Oil Inventories

Recent news out of Saudi Arabia regarding increasing production looks to be having a calming influence on the WTI market. It was not long ago that the leading investment banks were predicting $100 WTI crude. Now, traders are wondering if this market is headed back to $60.00 in the near-term.

Here is a quick look at industry expectations for the coming inventory cycle:

Event                                     Previous     Projected

API Crude Oil Stocks                 9.88M            NA

EIA Crude Oil Stocks                 6.35M          3.67M

In mere days, more sanctions are to be levied against Iran. The U.S. goal of “zeroing” out Iranian oil sales and exports is progressing quicker than expected, with another deadline for sanctions set to go into effect November 4. All eyes will be on Saudi Arabian output and their commitment to make up for any shortfall created by the Iranian sanctions.

WTI Crude Oil

Today’s session for December WTI crude has featured a bearish test of the $65.00 level and subsequent rejection. At press time, values are off slightly and a daily Doji candlestick may set up by the closing bell.

December WTI Crude Oil Futures (CL), Daily Chart
December WTI Crude Oil Futures (CL), Daily Chart

Overview: The action has been significant in December WTI. Traded volumes are approaching 500,000 contracts for the day, a large figure about halfway through the session. Expect more volumes to hit the market this afternoon on the API report and tomorrow morning on the EIA number.

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