Unbelievable! [Crude oil stocks fell by 14.51 million barrels] I’ve never seen a decrease of four digits before (・_・;)

Last week's weekly inventory report from the U.S. Department of Energy released on the 8th was a shock.

“Market expectations were for an average increase of 630,000 barrels compared to the previous week.”and that is a very typical forecast.

By the way, the previous statistics from the U.S. Energy Information Administration (EIA) released on August 31 showed“an increase of 2.28 million barrels”so from last week the inventories were expected to continue to rise, but the pace of increase was thought to slow down a bit.

When the actual numbers came in“an increase of 630,000 barrels compared to the previous week”the result contradicted that forecast, showing
【a decrease of 14.51 million barrels vs. the previous week】
which was a surprising outcome.

Moreover“a decrease of 740,000 barrels”was the forecast for gasoline inventories, but
【a decrease of 4.21 million barrels】far undershot the market expectation.

Even if crude oil inventory decreased, if gasoline inventories rose, the overall drop wouldn't have been substantial, and oil prices might not have moved much. Yet this time gasoline inventories fell sharply, and crude oil inventories fell by an astonishing4.51 million barrelswhich is a dramatic drop in inventories.

Looking at past trends,
combined crude and gasoline inventories reducing by about 2 million barrels more than expected generally sent crude oil up about $1,
combined reductions of about 5 million barrels typically sent crude oil up about $2
in the past.

So if crude forecast was +63 and ended up at -1,451, and gasoline forecast was -74 and ended up at -421 in total
that is a total decrease of about 18.61 million barrelsthenprices could have risen by around 4–5 dollars
which would have been reasonable, right?…my heart was racing.

But the result was…

prices jumped from $46.17 to about $47.70 momentarily,
then settled around $47.20.

The rise was only about $1… just because the inventory forecast shifted by 2 million barrels downward, it rose by one dollar?

If 18 million barrels were underestimated, prices might have risen by around 4–5 dollars.

If you split the 18 million barrel decrease over 9 weeks, with each week being about 2 million barrels less than forecast and prices rising by $1 each week for 9 weeks, it would be ideal…I, who are suffering with a long crude position, thought this.


This is an older image, but here is the miserable state of the long crude position


70 lots at -416,791 yen.
And just before that, a 10-lot stop was hit, resulting in -78,324 yen—quite a loss in that image

Since then, the rate has slightly rebounded, but you can understand still hoping for further gains.


But I, who once relied only on rate increases, will also advance!?
I changed my trading methodThe continuation article has been posted here — click to read more

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