Skip to content

XTB TRADEBEAT

Oil.WTI holding up despite DOE rise

Summary:

  • Weekly DOE inventories increase by 4.6M
  • Largest increase since March, but expected due to refinery outage after Harvey
  • Oil.WTI remains above $49 and close to 1-month high

A larger than expected build in the weekly DOE inventory release has had minimal negative impact on the oil price with traders seemingly rejecting the bearish data due to the knowledge that this increase was expected after the damage cause by hurricane Harvey last week. 

A rise to +4.6M in the headline reading marks the biggest increase in almost 6 months, but this number was only marginally higher than the +4.1M expected. Furthermore news in recent days that several refineries are ahead of schedule in resuming operations after the damage wreaked by the hurricane has caused many to believe that there won’t be a long term dip in demand for oil as a result of the storm.

A closer look at the components of the report also takes the edge off the negativity with notable declines seen in the distillate and gasoline stocks. US oil production showed a sharp decline of 7.9% in the past week, reflecting the damage caused by hurricane Harvey.  

link do file download link

 Oil.WTI has risen in recent days and recouped most of the last decline. Source: xStation

The outlook for Oil.WTI remains fairly positive with price now having retraced 78.6% of the latest decline after hitting 49.25 yesterday. A break and close above this level would expose 50.20 and a move above there could lead to the sequence of lower highs and lower lows that has been in place all year being negated.

 link do file download link

 Oil.WTI has made a sequence of lower highs (LH) and lower lows (LL) since the start of the year. Source: xStation

 

 

Disclaimer

This article is provided for general information purposes only. Any opinions, analyses, prices or other content is provided for educational purposes and does not constitute investment advice or a recommendation. Any research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Any information provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.

Past performance is not necessarily indicative of future results, and any person acting on this information does so entirely at their own risk, we do not accept liability for any loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.