June Crude Oil had a strong rally yesterday (Tuesday, April 26) rebounding off its overnight low of 42.50 and making a new high at 44.83. The US dollar was weak and this helped propel Crude Oil higher pushing it above Monday’s high of 44.04 to 44.20. June Crude Oil settled at 44.04. This was in front of the API Report which was expected to show build in supply of 1.75 million barrels.
The API report comes out after settlement and has moved price when the consensus view is off. This happened yesterday. Instead of a build, the report showed a surprise drawdown of 1.1 million barrels.
Gasoline had a drawdown of 400,000 barrels. Crude erupted and traded to the high of the day and a new high for the move at 44.83. Cushing had a large build of 1.9 million barrels which had no affect on the market. This is a breakout above a short term consolidation period around the 44.49 prior high.
Today we could see some fireworks as the EIA reports its inventory figures. IT is expected to show a build of 1.75 to 2.2 million barrels. The API now changes traders thinking for the report and the FOMC meeting comes to its conclusion and a dovish statement could send Crude past resistance levels.
If this scenario comes together will a flood of Shale oil come back online? Stay tuned, this will get interesting.
CLH16
- High - 44.83
- Low - 42.50
- Last - 44.66
Daily Pivots for 4/27/16
- R2 46.33
- R1 45.49
- PIVOT 44.00
- S1 43.16
- S2 41.67