EIA Reports Draw On Crude Oil Stocks
Shain Vernier • 2 min read
Earlier today, the U.S. Energy Information Administration (EIA) released its weekly inventories statistics to the public. The numbers showed a considerable draw, in line with seasonal trends. However, the report did run contradictory to last week’s, which showed a surprise increase in supply. Since the EIA stocks figures came out at 10:30 AM EST, October WTI crude oil futures have consolidated just above the $56.00 handle.
EIA Reports A Draw On Supply
This week’s inventories cycle has brought some good news to energy bulls. With WTI pricing firmly above $55.00, decreased week-over-week supplies have brought considerable bids to the market. Here is a quick look at the hard data:
Event Actual Projected Previous
API Crude Oil Stocks 3.5M NA 3.7M
EIA Crude Oil Stocks -2.732M -1.889M 1.580M
While the API and EIA numbers came in mixed, each does show a drop from last week’s levels. However, it appears that energy bulls are having trouble establishing an intraday bullish trend ahead of today’s FOMC Minutes.
October WTI Crude Oil Futures: Technical Outlook
The story of the past week for October WTI crude oil has been a slow grind north. Prices have rallied from beneath $55.00 to today’s intraday high of $57.13 ― is this the beginning of a bull run to $60.00?
In my opinion, no. WTI appears to be on the verge of returning to $55.00 in the near future. If the FOMC expresses major concerns over global economic growth for the near term later today, we may see a rapid late-week plunge in crude.
Overview: At this point, it is difficult to choose a direction in WTI for the remainder of the session. Price action is choppy and the daily range is a tight 111 ticks. However, if price closes the session above the Bollinger MP ($55.66) and Daily SMA ($55.46), a slightly bullish bias is warranted. If not, be on the lookout for a bearish run toward $50.00 by Friday’s closing bell.