RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

As the EIA Petroleum Status report was released Tuesday morning, crude oil was trading at $63.40 per barrel in the April contract.  While the previous evening’s American Petroleum Institute number showed a slight draw in inventories, the EIA number was bearish as there were inventory builds in crude oil, gasoline and distillates for the first time in weeks.

As this fundamental news was absorbed by the market, this also coincided with the contract being offered through a trendline drawn from the mid December 2017 lows as well as the lowest level the market had seen since January 18, eclipsing the low of that date.

The downward price action continues Wednesday morning as the contract trades near the $61.25 level, having traded as low as $60.86 earlier in the morning.  This marks the lowest trading of the calendar year as the last time the oil market traded below $61 per barrel was the beginning of the year when prices were headed upward.

Many also note the record longs in the commitment of traders which at times presents the possibility for stops to be hit should the trend reverse amid fundamental changes such as inventories shifting.  Calendar spread traders are also mindful of the effects of such changes in different contract expirations.

To discuss your trading, as well as such levels pre-report, please contact me at your convenience.

Crude Oil Apr ’18 60min Chart

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Michael O'Donnell

Mike started his career in the markets on the floor of the Chicago Board of Trade as a trade checker for a local market maker in the Dow Futures pit. This led to interning with an independent introducing broker and going on to work with a number of market participants including: speculating clients, hedge clients, introducing brokers, futures commission merchants, commodity trading advisors, proprietary traders, trading educators, system creators, and a number of international financial market participants.