X
<

Are US Crude Oil Traders Getting Nervous Near $50?

PART:
1 2 3 4
Part 3
Are US Crude Oil Traders Getting Nervous Near $50? PART 3 OF 4

Has the Crude Oil Inventory Spread Turned Bearish?

The US commercial crude oil stockpile

In the week ended September 8, 2017, the US commercial crude oil stockpile grew 5.9 MMbbls (million barrels) to 468.2 MMbbls. The market had expected a rise of 4.1 MMbbls. However, US crude oil prices rose 2.2% on September 13, 2017—when the EIA (US Energy Information Administration) released this data.

Has the Crude Oil Inventory Spread Turned Bearish?

Interested in UCO? Don't miss the next report.

Receive e-mail alerts for new research on UCO

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

Inventories spread

The spread between US commercial crude oil inventories and the inventory five-year average could be an important driver for US crude oil prices. Right now, inventories exceed the five-year average.

When the difference (or inventory spread) contracts, oil (UCO) (BNO) (DBO) prices usually see an upside. On the other hand, when the inventory spread expands, prices can come under pressure.

On a week-over-week basis, the inventory spread has risen 1.6 percentage points. But since the release of the inventory data on September 13, 2017, US crude oil prices advanced 0.3%.

Market forecast

The EIA will release the crude oil inventory data for the week ended September 15, 2017, on September 20, 2017. The market expects a rise of 2.8 MMbbls in US commercial crude oil stockpiles. However, the API (American Petroleum Institute) reported a rise of just half that on September 19. Still, it would take a fall in inventories by ~243 thousand barrels to stop the inventory spread from expanding.

Changes in the inventory spread could also concern Wall Street because equity indexes such as the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA) have some allocation to energy stocks.

X

Please select a profession that best describes you: