On Wednesday morning the U.S. Energy Information Administration ("EIA) said in its weekly report that crude oil inventories increased by
2.2 million barrels in the week ended November 3. Market analysts' expected a crude-stock loss of around 2.2 million barrels, which is today's reason for oil prices declining a bit.
The report also showed that gasoline inventories dropped by 3.3 million barrels, compared to expectations for a decline of 1.9 million barrels.
For distillate inventories including diesel, the EIA reported a fall of 3.4 million barrels.
When I got the full report it showed that Total Crude Oil and Petroleum Products (excluding the SPR) fell by 9,051,000 barrels.
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IMO the storage reports are bullish because (a) liquid inventories normally build this time of year and (b) gasoline + distillates, declined by 6.7 million barrels which is pretty darn big. Traders always focus on the crude oil number first before they get into the details.
Keep in mind that these weekly reports from API and EIA are nothing more than estimates, especially EIA's estimate of U.S. oil production which has been significantly overstated since March.
The pullback in the price of WTI is probably healthy. The spike up on Monday was an over-reaction to the news coming out of Saudi Arabia and there are very few details coming from the Kingdom. Plus, the U.S. dollar is up a bit. A stronger dollar pressures crude oil prices.
IMO as long as WTI stays over $55 we are in good shape and a test of $60 is likely before Christmas. A close over $57 on Friday would be VERY BULLISH in my opinion.
Cold air is moving into the Northeast where a lot of homes are still heated by burning oil. I worked for Hess Corp. for 18 years. We sold a lot of heating oil this time of year. A high percentage of people wait until the first real winter weather arrives before they fill their heating oil tanks. Check today's update at
https://www.weatherbell.com/premium/
and you will see a bullish forecast for heating oil and natural gas demand.