October Crude Oil grinded higher in choppy trading on Wednesday, September 7, 2016, as traders continued to buy into the freeze headlines from OPEC and Russia. Traders were also not eager to sell in front of the delayed API report.
The API report usually comes out on Tuesdays, but due to the Labor Day holiday on Monday it was pushed back to Wednesday. The report showed a huge drawdown of 12.08 million barrels in crude oil inventories, the most since January 1999. Traders were looking for a slight increase in inventories of 905,000 barrels.
Cushing, Oklahoma inventories declined by 700,000 barrels in line with the 900,000 barrel drawdown expected. Gasoline also had a huge decline. It dropped by 2.388 million barrels, much more than the 750,000 barrel decline expected. Distillates increased by 944,000 barrels.
The drawdown in crude oil inventories could be the result of the storms in the Gulf as oil companies shut down production due to the potential for the storms to reach hurricane force and cause damage to platforms. Tuesday’s trade formed an inside day candle, eating up most of the long shadow created from the holiday-Tuesday combined trading day.
A break above the 46.53 high could lead to a test of trendline resistance at 47.06 and then 47.49 (August 30 high). Support comes in at 45.37 (8 DMA) and then the 50 DMA at 45.06. The EIA report is out on Thursday morning and confirmation of the API report could lead to a test of resistance.
- High: 46.17
- Low: 44.55
- Last: 46.14
Daily Pivot Points for 9/8/16
- R2: 47.24
- R1: 46.69
- PIVOT: 45.62
- S1: 45.07
- S2: 44.00