Crude Oil – US Inventories Data Set to Impact Oil Today
Crude oil turned bearish during afternoon trading yesterday following worse than expected US consumer confidence and homes sales indicators. The news led to speculations that American demand for oil could drop, and resulted in prices dropping close to $0.70 a barrel to reach as low as $90.65.
Today, the main piece of news for oil traders is likely to be the US Crude Oil Inventories figure at 16:00 GMT. The indicator, which was rescheduled from Wednesday due to the Christmas holiday, is forecasted to come in at -1.6M, which would signal an increase in American demand. A lower than expected figure could help the commodity turn bullish during afternoon trading.
Fundamentals
The rally in Crude Oil futures prices continues, despite concerns that little progress is being made in Washington to avert the so called “Fiscal Cliff”. Front month futures have recently traded to highs not seen in nearly 2 months, after the announcement of arrests of individuals in the United Arab Emirates in an alleged terror plot. This news seemed to cause an increase in the “risk premium” seen in Oil prices, due to the heightened potential of supply disruptions out of the Middle East. However, with little new information forthcoming on the terror plot, some traders may start to turn their focus to the potential impact on Oil demand should the US experience rising tax rates and forced spending cuts if US political leaders fail to come up with an agreement. This may cause a lightening-up of long positions going into the New Year. Due to the Christmas Holiday earlier in the week, the weekly EIA energy stocks report will be released later this morning (11:00 AM EST), which is 2 days later than normal. Analysts’ estimates are for a draw of 1.7 million barrels of Crude last week, with refining operating rates expected to have fallen by 0.1% to 91.4%. Any major deviation from these figures could generate an oversized move in Crude prices, as lower liquidity due to light holiday trade may exacerbate market volatility.
Fundamentals
The rally in Crude Oil futures prices continues, despite concerns that little progress is being made in Washington to avert the so called “Fiscal Cliff”. Front month futures have recently traded to highs not seen in nearly 2 months, after the announcement of arrests of individuals in the United Arab Emirates in an alleged terror plot. This news seemed to cause an increase in the “risk premium” seen in Oil prices, due to the heightened potential of supply disruptions out of the Middle East. However, with little new information forthcoming on the terror plot, some traders may start to turn their focus to the potential impact on Oil demand should the US experience rising tax rates and forced spending cuts if US political leaders fail to come up with an agreement. This may cause a lightening-up of long positions going into the New Year. Due to the Christmas Holiday earlier in the week, the weekly EIA energy stocks report will be released later this morning (11:00 AM EST), which is 2 days later than normal. Analysts’ estimates are for a draw of 1.7 million barrels of Crude last week, with refining operating rates expected to have fallen by 0.1% to 91.4%. Any major deviation from these figures could generate an oversized move in Crude prices, as lower liquidity due to light holiday trade may exacerbate market volatility.
Crude Oil
At 10:40 GMT, Oil is trading at $90.91 per barrel, 0.20% lower from the New York close. Oil rose earlier, after reports showed a drop in crude oil inventories. Late Yesterday, the American Petroleum Institute (API) reported that the US crude-oil supplies fell 1.2 million barrels for the week ended December 21. This morning, Oil traded at a high of $91.49 and a low of $90.79. Yesterday, Oil traded 0.10% higher in the New York session, and closed at $91.12.
It has its first support at $90.14 and first resistance at $91.58.
Disclaimer The analysis we provide is based on the average estimate of price movements in one day. Does not guarantee what we deliver is actually a proper and correct. Everything that happens in the decisions you make on your trading transaction is to be Your responsibilities. Visit Us www.deryworldscorp.web.id
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