EIA Reports Huge Draw On Oil Supply

The weekly oil inventory cycle concluded earlier today with release of the EIA Crude Oil Stocks report. A theme of scarcity is growing in the oil markets, as a significant draw on supply was the order of the day. Subsequently, May WTI futures are well off of session lows and in position to test $60.00.

The EIA Reports A Massive Draw On Supply

A perfect storm is currently hitting the global crude oil markets. Reduced supply, seasonal buying, and geopolitical pressures stemming from Venezuela and OPEC have bidders lining up to go long oil. Here is a look at this week’s inventories:

Event                                     Actual    Projected     Previous

API Crude Oil Stocks             -2.133M         NA         -2.850M

EIA Crude Oil Stocks             -9.589M     0.309M     -3.862M

Yesterday’s API numbers were an appetizer for today’s main course. The EIA reported a 9.589 million barrel draw on supply ― an almost 6 million barrel drop week-over-week. This is a big number and one that cannot be ignored by energy traders.

WTI Crude Rallies Toward $60.00

For the past few weeks, we have talked about WTI hitting $60.00 per barrel in the near-term. While it took a few days longer than expected, the surprise EIA report has all-but-assured that this will occur.

Overview: In a Live Market Update from yesterday, I outlined a long trading plan from downside Fibonacci support. It looks like this entry will not develop as price has taken out Tuesday’s highs.

Due to the fundamentals at play, the bulls are dominating this market. If the bears do not dig their heels in near the $60.00 handle, WTI may be headed much higher in the near-term.

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

Related Articles

Ethereum Price Prediction Soars—$265M Liquidated, ETH Hits $2,331

7 hours ago

Save

Silver Eyes $33.24 Breakout as U.S.-China Trade Talks Heat Up

11 hours ago

Save

Oil Prices Eye $62 as U.S.-China Tariff Talks Boost Sentiment

11 hours ago

Save

Comments

0 0 votes

Article Rating

Subscribe

Login

Notify of

new follow-up commentsnew replies to my comments

Please login to comment

1 Comment

Oldest

Newest Most Voted

Inline Feedbacks

View all comments

Author

Shain Vernier

6 years ago

May WTI has hit $60.00, meeting heavy initial resistance. Be on the lookout for prolonged consolidation in this area.

0