EIA Reports Draw On Crude Oil Stocks

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.

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.

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