Crude oil inventory, is basically reserves of unrefined petroleum that is measured in number of barrels. The Crude oil inventory, also known as Crude Oil Stockpiles are kept as a buffer for changes in demand and supply of Crude Oil. The number of barrels of Crude Oil to be kept as reserve is dependant on how much oil is produced, political events, changes in global policies etc.
Crude Oil Inventory today can be known by the various reports released by the crude oil producers, namely,
- US API Weekly Crude Oil Stock
- US Crude Oil Inventories
- US Gasoline Inventories
- US EIA Weekly Distillates Stocks
The US API inventory report is released by the American Petroleum Institute (API) and U.S. Crude Oil Inventories report is released by the Energy Information Administration (EIA). These two are the most important reports on Crude Oil Inventory today.
The US API Crude Oil Stock inventory is released every week on Tuesday night at 02:00 AM (IST), and this impacts the crude oil price for the day trading session on Wednesday.
The US Crude Oil Inventories report, the US Gasoline Inventories report, and the US EIA Weekly Distillates Stocks report are released every Wednesday night between 08:00 PM and 09:00 PM. The release date and time of these reports may vary in case of holidays or because of other factors.
The price of Crude Oil today is affected by the actual Crude Oil Inventory today, the Crude Oil Inventory Data over a period of time, the Crude oil price trend, and the difference between Forecasted Inventory Data and Actual Inventory Data.
It is necessary to read the reports on Crude Oil Inventory as soon as they are released. Timing is everything in Crude Oil Price Trading.
The following are 5 tips to read Crude Oil Inventory Data easily:
Read all reports simultaneously to get the bigger picture. Reading just one report will not give you the right information for you to make a decision.
Buy or Sell can be judged only by clear indications of demand and supply in Crude Oil. If there is more actual inventory, then the price of Crude Oil will fall usually, since supply is more. But this is only a thumb rule. Read on to the next tip #3.
Do analyse Crude Oil Price trend for the past 2-3 days before the Crude Oil inventory is released. This will help you decide whether to buy or sell. Suppose the Crude Oil price have been falling in the few days before the Inventory data is released, even if the Actual Inventory is more than Forecasted Inventory, chances are, that the crude oil price might rebound.
There is another case you must consider, when the Actual Inventory is less than the Forecasted Inventory. This is a clear indication that the price of Crude Oil will increase in all probability.
Reading weekly Inventory data will not give you the complete picture. Please study the Monthly Inventory Data also, to fully understand the supply of crude oil. This will give you a clear trend when you correlate it with various world events like wars, policy changes by developed nations, policy changes by major oil producers related to crude oil and gasoline.
Trading in Crude Oil as a Commodity online can be done only by traders who are well versed in the latest news related to Crude Oil and its products in the world. It is not just dependant on how much of inventory a country has, but also on the global politics around oil pricing, the strength of US Dollar and wars in oil rich nations or nations where oil pipeline needs to be laid.
Do contact our experts in Crude Oil price trading at Enrich Broking, who can give you a clear picture and help you with decisions on a buy or a sell.