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Thread: Trading Oil

  1. #1
    Rookie Member texastrooper's Avatar

    Trading Oil !!!

    I hope this is the place to post this. I have a question about trading oil. Today, I was watching the news release on the crude oil inventory. I have been following a thread on another forum (which is dead now) and several people were trading oil on the news. The way I understood it is that if the inventory was down from what was expected, oil would go up and just the opposite on a high inventory. The last couple of weeks I have traded this way the result has been totally different. Have I got this screwed up? I would like to hear from somebody that trades with the news and could help me clear this up. I have attached the news release. And if you notice, the price of oil dropped. Thank you for your help.

    09:30 USD Crude Oil Inventories -3.431M -0.271M 1.657M
    09:30 USD EIA Weekly Distillates Stocks 2.012M 0.429M -0.196M
    09:30 USD Gasoline Inventories 0.210M -0.157M -1.803M

  2. #2
    Legendry Member Michael Hodges's Avatar
    at this time inventory injections are not as strong as expected but storage levels are near all time highs so it doesn't really matter if the build is more or less than expected, its still more on top of what is already the biggest stockpile of oil in history. Hope this helps.

  3. #3
    Moderator Kolyo's Avatar
    Actually crude oil inventory is not directly related to price action and may lead to some misleading trades if followed without additional analysis. Crude oil price is affected by many other factors including war risks in Middle East and production in many exporters. So for proper crude oil trading it is much better to include more elements for analysis and to look mostly on the technical picture. For example now the crude oil, both Brent and Texas are in down trend correcting the previous bullish impulse initiated from Iraq worries of arising conflict.

  4. #4
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by Kolyo View Post
    Actually crude oil inventory is not directly related to price action and may lead to some misleading trades if followed without additional analysis. Crude oil price is affected by many other factors including war risks in Middle East and production in many exporters. So for proper crude oil trading it is much better to include more elements for analysis and to look mostly on the technical picture. For example now the crude oil, both Brent and Texas are in down trend correcting the previous bullish impulse initiated from Iraq worries of arising conflict.
    trding oil is complicated, all that you say is true....inventory by itself is not a major mover but can provide some movement, but it level based on historic and total levels in terms of geo political risk, supply disruption, estimated reserves, shifting global demand all have a big impact on price movement.

  5. #5
    Active Member RichardD's Avatar
    What do you guys think about the recent developments (ISIS)? You think it will have an effect on the price of OIL?

  6. #6
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by RichardD View Post
    What do you guys think about the recent developments (ISIS)? You think it will have an effect on the price of OIL?
    ISIS is a non event for oil right now, they are interested more in the expansion of islamist state than in oil or money at this time. that could change though. Keep an eye on Libya now, production is coming back on line but violence is unabated.....

  7. #7
    Veteran Member Dan21's Avatar
    Crude oil now is too complicated to trade. Despite the Middle East tensions the price is going lower and lower for more than 10 days. Crude oil inventory is also not a major factor at the moment, so what is your opinion, what will happen next?

  8. #8
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by Dan21 View Post
    Crude oil now is too complicated to trade. Despite the Middle East tensions the price is going lower and lower for more than 10 days. Crude oil inventory is also not a major factor at the moment, so what is your opinion, what will happen next?
    earnings and economics will point to longer term demand/demand growth and that will have an impact on prices, not sure which direction but stockpiles are high and summer driving in the US is half over. ....

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