Crude's drop on OPEC, EIA news
Oil broke trough $41.83 after DOE EIA inventories data yesterday and pushed the "black gold" down from 42.57 in its high to 40.77 for the close. Talks of OPEC agreeing on output cut didn't lift much up the commodity. First came up the news from OPEC as the headlines were: "Iran says majority of OPEC members agree on output cut: Shana"; "Saudi Arabia and gulf Arab countries do not support a cut". The first headline came two minutes before the second headline. Oil surged on the first headline and then fell back on the second. Data from the US EIA inventories: 1177k vs. -800k estimate:
- Prior +961k
- Cushing 428k vs 725k est. prior 1744k
- Gasoline inventories 135k vs. 1550k est. prior 2478k
- Distillate inventories 3051k vs. 500k est. prior 1046k
- US refinery utilization 2.5% vs. 0.5% est. prior 1.7%
Very bearish numbers indeed. 40.69 is the new level in play, as the price is finding some support there, but as mentioned, be on a lookout for bearish EIA data or changes in the OPEC policy. 39.51 is yet to be reached so hold on any early bearish entries you've had. Trade with the trend - as he is your friend.