CRUDEOIL investing: Inventory report
Crude Oil inventory is the number of stock of crude that is held by US firms in barrels which are released by EIA On a weekly basis that measures the change in crude oil stock of US firms.
The crude oil market is a global market that changes with investor sentiment on a daily basis.
The change in crude oil inventory affect the price of petroleum products mainly crude oil price
The change in crude oil inventory reveals the weekly crude oil demand and supply if the change in crude oil inventory is more than forecast and previous crude inventory than it shows the weaker demand in crude oil that means the price of crude oil should go down as the inventory report announce by the EIA
Brent crude oil:
Brent crude oil is one of several types of light sweet crude that serves as the global benchmark for crude oil. Brent is described as mild due to its low density, and sweet due to its low odor. Brent crude is extracted from the North Sea and includes Brent Blend, Forties Blend, Oseberg. The use of Brent crude oil accounts for about 65% of all global crude oil prices.
WTI crude oil vs Brent crude :
Another very actively traded crude oil is WTI (West Texas Intermediate It is another mild sweet crude oil that is used in the refining process of making gasoline. WTI is the US benchmark and since the US is the world’s largest consumer of gasoline, WTI is an actively traded crude oil benchmark.
Since both WTI and Brent producers compete for the same refiners as customers, the spread between the two oils is an important matrix for the refiner. The WTI has been cited on the Chicago Mercantile Exchange for pickup in Cushing Oklahoma. This area is landlocked and therefore requires shipment via pipeline or rail. The WTI is also quoted in US dollars per barrel.
The spread between Brent and WTI has been more than $ 28 per barrel and as low as $ 3.6 per barrel. When the spread is extended there is an incentive for American refiners to buy WTI at Brent. When the spread is negative, the reverse is the case.
How To Trade With Crude Oil Inventory: Crude Oil investing
For better trading accuracy always trade with fundamental analysis(inventory report) and technical analysis when both analyses are on a single side then trade with proper stop-loss and target:
1. If crude oil inventory is less than forecast and more than previous than inventory effect on crude oil price likely to neutral and may be range-bound trading may happen in crude oil
2. If crude oil inventory is less than forecast and previous it shows the weaker supply of crude oil and shows higher demand for crude thus the price of crude oil may likely to suddenly go up as an inventory report announce by EIA.
3. Crude oil inventory: a report published every Wednesday at 2000 hrs IST or 1030 EST during summer and during winter it is shifted by the 0030-minute report are published on the forex factory.
4 Trading during crude oil inventory is little volatile and risky so always trade with technical analysis and crude oil inventory report when both are same trend trade otherwise wait for right time and level
5. for Advance report analysis always take an average of 12 months, then compare with the actual report if the report is less than average, inventory is positive for crude or vice Versa.
FAQ ON CRUDE OIL INVENTORY:
1 Crude oil inventory report release time:
The Crude oil inventory report publish on every Wednesday at 0930 am (2000 hrs IST) during the summer season and at 1030 (2100 hrs IST) during the winter season, live data is published on the forex factory
2 How crude oil inventory report impact on crude oil prices?
The crude oil inventory has a fundamentally effect on crude oil price, during inventory time crude become more volatile due to demand and supply forecast if actual inventory is more than forecast, it produces more supply than demand thus price fall and vice versa.
Note: when inventory report announced trading in crude will more volatile so always trade with levels and inventory report