In the major press articles the tanker crisis in the Middle East has determined the headlines in recent days when it came to the development of the oil price. However, this event only had a very brief real impact on the price trend last Thursday with a rise of 2 dollars in the WTI oil price. Since then it has been slowly but surely going down again.
Tanker attacks not relevant on futures market
So far, our assumptions seem to have come true that such supposed crises in the Middle East have a very short depreciation period in terms of oil prices. But we should never completely rule out the possibility of an escalation! But currently the professional players on the futures market are ignoring this incident in the Gulf of Oman. Rather they are looking at other factors (here our former comment).
This evening at 10:30 p.m. German time the private “American Petroleum Institute” (API) reports its calculated inventories for crude oil in the USA (here a data review of the last weeks). In the last two weeks API inventories had increased by 3.5 and 4.9 million barrels respectively. Although not always reliable, they have recently been good indicators of the US government’s official inventory levels reported on Wednesday afternoons. Inventories have been rising strongly for months. Is it going up today and tomorrow?
Oil price in waiting position before fourth crash
The fuller the inventories become, the stronger they are to be seen as an indication that so much oil is produced worldwide that there are not enough buyers. This is why production surpluses migrate to the warehouses. This naturally puts pressure on the price of oil. Over the last three weeks government oil stock data in the US has been rising and each time there has been a downward surge in oil prices since then (as shown in the chart). The three down arrows show the price drop after the rising inventory data. The up arrow shows the short-term “rescue” from another crash caused by the tanker incident. But since then oil is falling again towards new lows.
The WTI oil price is currently quoted at 51.61 USD. Of course, stock levels are also related to weak global demand due to the weak economy. The two are virtually linked. The fuller inventories are ultimately the result of weak demand. So: keep an eye out for what will be announced for the inventories this evening and tomorrow afternoon. The oil price must slide only good 1 USD, then in the large picture there is room to the low from December with 42-43 USD