Excess inventory reduction exceeded expectations, and the resilience of demand was continuously verified
The latest EIA data shows (as of the week ending October 31), U.S. crude oil inventories decreased by 4.5 million barrels on a month-on-month basis (expected - 1.8 million barrels), and inventories have exceeded expectations for two consecutive weeks of reduction; gasoline inventories decreased by 3.2 million barrels (the largest decline in the same period since November, nearly 5-year low), refined oil inventories decreased by 2.8 million barrels, and inventories of the three major oil products were all below the 5-year average by 10%-15%. The inventory in the Cushing region increased by 800,000 barrels, but the overall reduction trend did not change, and the marginal tight balance feature of supply and demand was prominent.
Increased risk of Red Sea transportation, intensified supply chain disruptions
The Houthi armed group has recently intensified attacks on Red Sea merchant ships. Since November, 5 oil tanker ships have been attacked, and some oil tankers were forced to take a detour around the Cape of Good Hope (the voyage increased by 30%, transportation cost increased by 200,000 US dollars per ship). Currently, Red Sea crude oil transportation accounts for 12% of the global total. If the situation worsens, it may add 50-80 thousand barrels per day of supply disruptions.
The expectation for Fed rate cuts has risen again, and the US dollar is under pressure, which benefits oil prices
The U.S. 10-month CPI increased by 3.2% (lower than the expected 3.3%), and the core CPI increased by 2.9% (the lowest since January 2023), and the probability of the Fed cutting interest rates by 25 basis points in December from 55% rose to 78%. The US dollar index fell below the 93 threshold, the cost of purchasing non-US currencies decreased, and China and India's crude oil imports are expected to increase by 5%-8% month-on-month in November.
Crude Oil Trading Strategy for Today
buy：59.5-60
tp:61-61.560
sl:58.5
The latest EIA data shows (as of the week ending October 31), U.S. crude oil inventories decreased by 4.5 million barrels on a month-on-month basis (expected - 1.8 million barrels), and inventories have exceeded expectations for two consecutive weeks of reduction; gasoline inventories decreased by 3.2 million barrels (the largest decline in the same period since November, nearly 5-year low), refined oil inventories decreased by 2.8 million barrels, and inventories of the three major oil products were all below the 5-year average by 10%-15%. The inventory in the Cushing region increased by 800,000 barrels, but the overall reduction trend did not change, and the marginal tight balance feature of supply and demand was prominent.
Increased risk of Red Sea transportation, intensified supply chain disruptions
The Houthi armed group has recently intensified attacks on Red Sea merchant ships. Since November, 5 oil tanker ships have been attacked, and some oil tankers were forced to take a detour around the Cape of Good Hope (the voyage increased by 30%, transportation cost increased by 200,000 US dollars per ship). Currently, Red Sea crude oil transportation accounts for 12% of the global total. If the situation worsens, it may add 50-80 thousand barrels per day of supply disruptions.
The expectation for Fed rate cuts has risen again, and the US dollar is under pressure, which benefits oil prices
The U.S. 10-month CPI increased by 3.2% (lower than the expected 3.3%), and the core CPI increased by 2.9% (the lowest since January 2023), and the probability of the Fed cutting interest rates by 25 basis points in December from 55% rose to 78%. The US dollar index fell below the 93 threshold, the cost of purchasing non-US currencies decreased, and China and India's crude oil imports are expected to increase by 5%-8% month-on-month in November.
Crude Oil Trading Strategy for Today
buy：59.5-60
tp:61-61.560
sl:58.5
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💎 Free Trading Signals: t.me/+e1D3W7yOpLMzNTYx
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.