CRUDE OIL had a DRAW of 3874K. Consensus was for a DRAW of 1750K. BULLISH (AND OFF THE CONSENSUS!)
GASOLINE had a BUILD of 3385K. Consensus was for a BUILD of 500K. BEARISH(AND WAY OFF FROM THE CONSENSUS!)
DISTILLATE had a BUILD of 308K. Consensus was for a BUILD of 900K. BEARISH (AND OFF FROM THE CONSENSUS!)
Another contrary report here with mixed numbers. Contrary because the analysts (who are these people and how much are they getting paid?) have it way wrong again! But what really matters to us is the trading environment.
As I have mentioned in the last two oil inventory posts we have had an extended run for oil almost to its 200 TANKS. The OIH and the XLE were ready for consolidation and/or a retreat back to their 200 TANKS or at least to test the recent breakouts, which looks like what is could be playing out right now. We have also had BEARISH DIVERGENCE setting up wherein the candles show strength yet the indicators show weakness.
Let’s look the DAILY charts for the USO, XLE, and the OIH:
USO DAILY:
XLE DAILY:
OIH DAILY:
CONCLUSION:
USO could be heading to the 21 TANKS for possible support or could head lower with the XLE and OIH that have both broken through their 21 TANKS support and could now be headed to their respective 50 TANKS support. The XLE and OIH also have 200 TANKS support along with the 50 which are converging.
Will the USO find support at the 21 TANKS as the XLE and OIH find support at the 50/200 TANKS area? Could be the case.
Looks like some good opportunities to trade on the short side until we find support to possibly go long again. Anything can happen in the oil patch.
Just trade your edge and keep your eye on the general market at the same time. Could be building a bunker or preparing to launch a missile-the oil market will likely follow.
