Fueled by a surprise EIA Crude Oil Stocks report, January WTI futures are trending to the bull on heavy volumes. At press time (2:20 PM EST), there have been around 645,000 contracts of January WTI traded. Subsequently, prices are up more than $2.25 per barrel and threatening to go higher. 

EIA Reports Major Draw On Supply

The weekly inventory cycle is now complete. To say the least, it appears holiday travel demand has cut into supply levels significantly. Here is a quick look at the data:

Event                                          Actual       Projected      Previous

API Crude Oil Stocks                -3.720M          NA               3.639M 

EIA Crude Oil Stocks                -4.856M       -1.734M         1.572M

It doesn’t take a rocket scientist to see that these figures are deep into the negative. Both the API and EIA are showing a supply drop of more than 6 million barrels week-over-week. Even considering the increased demand for refined fuels due to holiday travel, this is still a major draw on supply.

Overview

From a practical standpoint, today’s negative EIA Crude Oil Stocks report may be interpreted in a number of ways. First, it may be seen as only a temporary phenomenon due to the Thanksgiving holiday travel demand. Second, the falling supplies may be viewed as a precursor for a blockbuster holiday retail season.

Thus far, American holiday spending is robust. The sales figures from last week’s Black Friday shopping holiday are estimated to be $7.2 billion, up 7% from last year. In addition, Cyber Monday sales are projected to come in at $9.4 billion, a 20% year-over-year increase. 

So, what does it all mean? With oil supplies falling and retail sales up, consumption is at or near all-time highs. If nothing else, these two factors will very likely contribute to an exceptionally strong collection of U.S. economic growth metrics due out in early 2020.