2 Jan

How Much Fall in Inventories Could Support Oil This Week?

WRITTEN BY Robert Scott FEATURED IN Commodities

EIA inventory report

In the week ended December 22, 2017, US crude oil inventories were 431.9 MMbbls (million barrels), a fall of 4.6 MMbbls compared to the previous week. The figure was based on the EIA’s (U.S. Energy Information Administration) report on December 28, 2017. That same day, US crude oil prices rose 0.3%.

How Much Fall in Inventories Could Support Oil This Week?

Inventories spread

The spread between US oil inventories and their five-year average, or the inventories spread, is important for oil prices. Usually, oil prices move opposite to the inventories spread. That means a fall in the inventories spread could help oil (UCO) (BNO) prices rise.

In the week ended December 22, 2017, the inventories spread was 9.2%, or 1.5 percentage points lower than the previous week. After the inventory data on December 28, 2017, US crude oil (OIIL) (USL) (DBO) futures rose 1% to date.

What oil traders should expect

In the week ended December 29, 2017, US crude oil inventories would have to fall 6.9 MMbbls in order for the inventories spread to narrow and support oil prices. On January 4, 2018, the EIA will release its oil inventory report. In the next part, we’ll take a look at the US crude oil futures spread.

Latest articles

25 Mar

Oil Bulls: Is a Recession Coming?

WRITTEN BY Robert Scott

On March 15–22, US crude oil May futures rose 0.4% and closed at $59.04 per barrel.

25 Mar

Will Micron’s Revenue Growth Remain Sluggish?

WRITTEN BY Scarlett Ness

Micron has given a weaker-than-expected revenue forecast for the third quarter but expects memory chip demand to recover in the fourth quarter.

Signet Jewelers (SIG) is expected to report weak fourth-quarter results on April 3.

25 Mar

Energy Sector: Analyzing Key Events This Week

WRITTEN BY Robert Scott

The EIA is scheduled to release its oil and natural gas inventory data on March 27–28, which could be a short-term driver for oil and natural gas prices.

On March 22, J.P. Morgan (JPM) downgraded PPG Industries' (PPG) rating to "underweight" from "neutral."

25 Mar

Cannabis Sector: Mixed Bag Last Week


The week ending March 22 was a mixed bag for the cannabis sector. The cannabis sector ETFs ended largely in the negative territory.