Oil inventories are effectively a glimpse of supply and demand in the oil market and are a key factor that influences the crude prices. As of Jan month crude forecast is coming on every Wednesday at 9 PM and thus you need to keep track of the day and time as it can change due to day light saving hours concept in USA.
Conclusion
Thus we can say that an increasing oil inventory means that the crude prices may go down and declining oil inventory means that the crude price will go up but remember that the mismatch is taken care in a fraction of seconds and you have to be on the right side of the market to take benefit from its movement as per the inventory.
You can check our crude oil tips here and make money without any tension in the market as we track the commodity market round the clock and are abreast of the latest developments even before the media channels due to our global tie-ups. We handhold you through the whole process so that you become a professional commodity trader.
Oil Inventories is Increasing Means
The commodity market is dynamic in nature and thus one needs to be dynamic in approach as crude price adjustments can be instantaneous. Now we come to the crux point that what happens when oil inventories go up and it means that the traders may question the demand for oil at the current price and may immediately sell their positions, causing a price retreat. An increase in supply suggests that sellers are willing to produce more oil at the current price than purchasers demand. In theory, to encourage demand, suppliers should reduce the price and see if more buyers come to the market at a lower price point. Excess oil supply is maintained in inventories, some of which are kept by governments to hold in reserve.Oil Inventories is Decreasing Means
When oil inventories decline and it means that the traders can take this as a signal that demand is increasing, and they may buy back into the oil market, bidding up prices. When supply declines, it means there is ample interest from buyers at that price point. In this situation, there may be room for sellers to increase prices.When this Oil Inventory is Released & How you should Trade?
The U.S. Energy Information Administration (EIA) provides a weekly update on domestic inventories and as a crude trader, you can not afford to miss it. Ideally, you should close your trades in this segment at least 45 minutes before the announcement of the inventories by U.S. Energy Information Administration and thereafter you can trade position as soon as it is declared. The report by U.S. Energy Information Administration looks like this as shown in the below screenshot.
Conclusion
Thus we can say that an increasing oil inventory means that the crude prices may go down and declining oil inventory means that the crude price will go up but remember that the mismatch is taken care in a fraction of seconds and you have to be on the right side of the market to take benefit from its movement as per the inventory.
You can check our crude oil tips here and make money without any tension in the market as we track the commodity market round the clock and are abreast of the latest developments even before the media channels due to our global tie-ups. We handhold you through the whole process so that you become a professional commodity trader.
Example
Commodity Alert - Crude oil Inventories (Actual/Forecast) Crude oil -3.5M/-2.0M
Inference : Inventory is Supportive For Crude oil.
