- DOE shows a modest inventory build, but the report still looks oil positive
- Oil could be in an upward trend now
The DOE report showed a build in oil inventories but it was a very tiny and while original expectations saw a draw, markets were prepared for even a worse report after the API release yesterday.
Oil inventories +0.12mb, original consensus -2.15mb, API +0.85
Gasoline inventories -0.3mb, original consensus -0.51mb, API +1.35
Distillate inventories -0.22mb, original consensus +0.6mb, API +0.68
So all in all the DOE report was much butter than the API indicated plus it had somewhat surprising decline in output. It is partly a result of stoppages in Alaska yet decline is decline.
US oil inventories are still higher than in any previous year of this decade but this could change soon. Source: Bloomberg, XTB Research
When you look at overall US oil inventories they are still close to record highs but do notice that a “2017 path” has been flatter than previously. If seasonal patterns hold, 2017 path could soon cross 2016, suggesting a slow but consistent re balancing on te market. If that’s the case oil could see a rally from depressed levels. So far we see a trend building up on H1 interval.
We see an upward trend on H1 interval. Retest of 50/75 moving averages could present decent opportunities to join it. Source: xStation5