EIA Reports Massive Build In Oil Supply
Shain Vernier • 1 min read
The weekly crude oil inventory cycle is complete and supplies are up as expected. Given the reduced travel prompted by the novel coronavirus, demand for refined fuels is way down. As a result, oil stocks are growing by the week. Today’s EIA report showed a massive build in North American supply and cast more doubts on the future of the global energy trade.
EIA And API Report Large Week-Over Week Supply Builds
At 10:30 AM EST this morning, the U.S. Energy Information Agency (EIA) released its stocks numbers to the public. The report wrapped up this week’s inventory cycle, which came in as follows:
Event Actual Projected Previous
API Crude Oil Stocks 6.407M NA 1.690M
EIA Crude Oil Stocks 7.664M 2.266M 0.785M
Both the API and EIA reports posted staggering weekly gains. Right now, the world is swimming in crude oil with serious demand-side questions on the horizon.
WTI Crude Oil Holds Firm Above $33.00
Since last Sunday’s GAP down, April WTI crude oil has been actively seeking any sort of normality. At this point, the bearish trend is intact as today’s rally appears to have failed at the 38% retracement and GAP area.
Overview: In a Live Market Update from earlier this week, I outlined a short trade recommendation from the 38% Retracement ($35.48) in April WTI. The play turned out to be a miserable loser, with the stop loss being hit quickly on a bullish sweep of price.
Now, it appears that last night’s buyers are becoming exhausted and the downside is back in play. As long as the 38% Retracement Remains valid resistance, an extreme bearish bias is warranted for WTI crude.