EIA Inventory Observed After API Inventory Creation, Inventory Releases in China

Crude Oil, EIA, API, Inventory, China, OPEC, Supply – Talking Points

Crude Oil Prices Extend Overnight Fall Through APAC Trading

Featured EIA Inventory Numbers After API Showed Great Build

Key moving average in defense as bears take the driver’s seat

Crude oil prices are spreading lower on Wednesday’s Asia-Pacific trading day after an overnight slump. WTI was down around 1.5% on Tuesday after Monday’s carast 0.17% loss. prices of Brent, the world’s benchmark, are also facing downward pressure, although not as much as its US counterpart.

underperformance of US prices is likely due to an inventory report that showed a larger than expected inventory build-up. American Petroleum Institute (API) reported an inventory increase of 3.594 million barrels for the week ended October 29. More than 2 million barrels than analysts predicted, according to the DailyFX Economic Calendar.

Energy traders now turn their attention to the upcoming US Energy Information Administration (EIA) inventory report. government report, which normally tracks API numbers, generally requires more attention from the market. Analysts expect the figure to exceed 2.225 million barrels for the week ending October 29. That would be just over half of the 4.267 million barrels from the previous week. Cushing Oklahoma Imports and Inventories can also provide information.

Organization of the Petroleum Exporting Countries and its allies (collectively known as OPEC +) will hold a meeting later this week, on November 4, to decide on production increases. Analysts expect the cartel to stay the course for a 400,000 barrel per day (bpd) increase. Kuwait and Iraq have publicly supported that figure, making the outcome even more likely. However, a surprise decision above 400,000 bpd would likely put pressure on prices.

OPEC faces increasing political pressure to bring additional supply to market as prices exceed $ 80 a barrel. Higher costs have caused gasoline and diesel prices to skyrocket, which only added to inflation problems. US President Joe Biden has publicly asked OPEC to increase the offer. Over the weekend, China said it would release fuel reserves in response to a domestic diesel shortage. public announcement is believed to be the first in Beijing. This suggests that the ad could be designed with the effect of chilling prices on its own.

Crude Oil Technical Forecasts

Falling prices puts the 20-day Simple Moving Average (SMA) in defense. Outside of intraday movements, prices have not traded below the key moving average since August. That said, a sharp break below the level could open the door to further losses. 38.2% Fibonacci retracement and the psychological 80 level would change focus if the 20-day SMA breaks out. Both the MACD and the RSI are trailing significantly lower, suggesting that more weakness is likely.

Daily Crude Chart

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Also read 3 steps to use earnings reports

Chart created with TradingView

– Written by Thomas Westwater, Analyst at DailyFX.com

Contact Thomas, use the comment section below or @FxWestwateren

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