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Oil Stocks Grow According To EIA

Posted Wednesday, December 11, 2019 by
Shain Vernier • 2 min read

The weekly crude oil inventory cycle is now complete, as the U.S. Energy Information Administration (EIA) has released its supply stats. A robust week-over-week build was the theme this morning, in concert with seasonal trends. January WTI crude oil futures have reflected the uptick in stocks on hand. At press time (1:10 PM EST), prices have fallen just beneath the $59.00 handle.

EIA, API Crude Oil Stocks Reports Are In…

With the Christmas and New Year’s holidays coming up, this week marks the second-to-last normal crude oil inventory cycle of 2019. Following next week’s API and EIA numbers, the trading volumes surrounding each subsequent release will become chaotic. In any case, here is a look at this week’s supply figures:

Event                                          Actual      Projected       Previous

API Crude Oil Stocks                  1.41M           NA               -3.72M

EIA Crude Oil Stocks                 0.822M     -2.763M         -4.856M

On a week-over-week basis, stocks have come in extremely positive. It appears that the spike in Thanksgiving travel demand has receded to normal levels. However, with Christmas and New Year’s rapidly approaching, it is tough to say how inventories will fare in the next several weeks.

Following today’s EIA report, January WTI crude plummeted to a test of $58.00. Since then, bargain hunters have stepped in and bid this market north by more than $0.75 per barrel.

EIA
Global Crude Oil Is Positioned To Close 2019 On The Bull.

Overview

2019 has been a fascinating year for crude oil. The action has been largely rotational,  with prices of January 2020 WTI rotating between $65.00 and $50.00. Values peaked in April, with a high above $64.00. At this point, WTI is in the midst of a two-month winning streak. If prices settle the year above $55.00, then that will make three consecutive positive months.

Perhaps the most important number for January WTI crude futures is the 62% retracement of 2018’s plunge, $62.26. Technically, the long-term trend for WTI remains bearish; if we see a positive monthly close above $62.26, then a Spring 2020 challenge of $72.50 may become a reality.

***Correction*** 

Over the course of this week’s updates, I have been referring to today’s FOMC Interest Rate Decision as the “FOMC Minutes.” While the FED is in action today, this phrasing is incorrect. Please disregard the previous verbiage accordingly. Thank you!

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