Crude Oil recap for 23.05.2018
Crude oil had its sharp drop Yesterday as well as U.S. weekly DOE oil inventories data came in at +5778K vs -2000K expected. Summarized the data for energy inventories and production data looks like this:
- Prior was -1404K
- Gasoline +1883K vs - 1430K expected
- Distillates -951K vs - 1250K expected
- Cushing -1223K
- Imports - 8.159mbd
- Exports -1.748mbd
Big surprise build in inventories and oil prices have quickly dropped. Price opened at 71.99, made an attempt to move up to 72.14 and as the date came in, price plunged fast to a low of 71.09, but price made a bounce back, covering the losses from the news, closing at 71.69. Next possible test would be 71 before jumping to any conclusions that the price of oil will reach 73 or beyond. Even though there are tensions in the Middle East and tension with Iran may turn in to a diplomatic crisis, events which gave a boost to the Oil price, Inventories shows that Oil demand is low. Next Thursday we have Inventories data as well and for now it is too early to tell what are the expectations. Watch out for that and any change in sentiment regarding Iran.
Overall the trend for Oil is moving up as still the movement is inside of the big daily trend lines. We'll see if the price has reached a top now for a deeper correction to 68-67 levels. If demand is weak, the price will reverse for sure. Tensions will keep the price up. Stay on guard with those longs now as lower demand will move the price for some time, even it my try to make a short range between 71 and 72.70.