- DOE inventories 2.4M vs 2.6M exp and 3.0M prior
- 5 of the past 6 weeks have now shown increases
- Oil falls sharply after initial rally fails
The weekly DOE inventory data from the US has shown another build and despite an attempt to move higher immediately following the release the Oil markets remain under pressure. A rise of 2.4M was marginally lower than the 2.6M expected, and given that last night’s API showed a large build of 5.7M the initial move to the upside could be expected.
After attempting to rally, the Oil price has taken a turn for the worse in the last 15 minutes with the market dropping sharply. Source: xStation
The surge higher was around 60 cents but this has since been erased in its entirety and the market now trades lower on the day. Taking a step back today’s data could be seen to be pretty negative and despite the gain being less than expected, it was a gain nonetheless. The rise marks the 5th increase seen in the past 6 week and it is quite clear that US stock piles are experiencing a near term uptrend.
Oil may be forming a longer term head and shoulders. Recent lows of 63.23 and, more importantly if price get there, 61.20 are possible levels to watch for support. Source: xStation
The bigger picture for Oil does show a possible longer term topping pattern in play with a head and shoulders potentially forming. The market has now turned negative on the week and the recent move higher stopped short of a possible second shoulder at 67.66. The all-important neckline is the key here and that could be seen to be around 61.20. The declines stopped short of retesting this pivotal level last week but given this severity of this latest drop we could be heading for it in the not too distant future.
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