Wednesday’s Commentary On WTI Crude Oil (USO)
$USO
WTI Crude Oil fell sharply Tuesday, as participants awaited the release of the American Petroleum Institute’s (API) weekly stockpile report after the bell for further indications on the supply/demand imbalance in domestic energy markets.
Tuesday after the close of trading, the API unveil its US Crude inventory report for the week ending 23 October, one week after reporting a surprising build of 7.1-M bbl.
Wednesday the government report could show that US Crude stockpiles rose by 3.0-M bbl. Last week, the US Energy Information Administration (EIA) reported that Crude Oil stockpiles rose by 8-M bbl on the week.
Crude Oil prices are down 3 days running.
The front-month WTI contract -5% since last Friday.
Besides the broadly based concerns over the growth outlook, the commodity sold off on the news that Congressional leaders agreed to sell 58-M bbl of WTI Crude Oil from the US Strategic Reserve over 6 years, starting in Y 2018, to help fund the budget, further increasing supply.
The Brent Crude contract has lost more than -2% since Friday
Outlook for Crude Oil, due South or Very Bearish
Position: Short
Crude Oil has fallen this year and US gasoline demand softened. WTI Crude Oil could fall to as low as 10 bbl as the Organization of Petroleum Exporting Countries (OPEC) engages in a “Price War” with rival producers, testing who will cut output 1st.
Iran is soon to release 53-M bbl to the market and will be producing up to 1.5-M BPD in 6 months or so.
Long term technical and fundamental outlook for both Brent and WTI Crude Oil is due South.
OPEC says it will cut production but is not doing that, and are going to see who can stand lower prices longest, since October of 2014 HeffX-LTN sees that Crude Oil is likely is headed for 20 – 22 bbl in the mid term.
Stay tuned…
HeffX-LTN
Paul Ebeling
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