EIA Crude Oil Stocks Spike 12.2 Million Barrels
Shain Vernier • 2 min read
It’s Wednesday afternoon and that means the weekly crude oil inventory cycle is complete. Stocks-on-hand have come in surprisingly strong, bucking summer seasonal trends. At this hour (about 2:15 PM EST), WTI futures are relatively unchanged on the session. For the time being, energy traders are happy with WTI crude oil firmly around the $42.00 level.
EIA Reports Dramatic Uptick In Stocks
A bit earlier today, the EIA reported a spike in oil stocks for the week of July 17. This release comes on the heels of yesterday’s extraordinary API report. Without further delay, here’s a look at the inventory data:
Event Actual Projected Previous
API Crude Oil Stocks 7.544M NA -8.322M
EIA Crude Oil Stocks 4.892M -2.088M -7.493M
Both the API and EIA agreed that oil supplies grew significantly on a week-over-week basis. At this point, it’s unclear what the change means to the oil markets. WTI pricing remains above $40.00 and in bullish territory. If we don’t see bearish pressure creep into the energy markets by the weekend, one is inclined to believe that $40.00 is going to be a robust WTI support level.
USD/CAD Falls Toward Downside Support
For more than five weeks, the USD/CAD has consolidated between 1.3500 and 1.3700. Now, prices have left that value area to the downside.
Going into late-week trade, there’s one level on my radar:
- Support(1): 78% Fibonacci Retracement, 1.3327
Bottom Line: If the USD/CAD continues to fall as late-July wears on, a buying opportunity will come to pass. Until elected, I’ll have buy orders in the queue from 1.3331. With an initial stop loss at 1.3294, this trade produces 38 pips on a standard 1:1 risk vs reward management plan.
Finally, forex fundamentals have awoken the Loonie from its slumber. Rising Canadian inflation and solid WTI prices both contributed to today’s bearish breakout. As is true for all majors, next week’s tone from the FOMC will set up the remainder of summertime forex action.