Oil Continues to Slide LowerPosted 10/18/2018 9:19AM CT |
Oil futures continue to sell off as inventories rise and liquidation from speculators continues. We saw the fourth straight week of inventory builds last Wednesday, with a weekly build of 6.49 m/b. Total inventory stocks are currently 416.441 m/b vs the 5-year average of 413.389 m/b. There was a lot of discussion about how the missing journalist could create tensions between the U.S. and Saudi Arabia, however, it should have no impact on oil supplies. One statistic to pay attention to is oil exports to China. Currently the U.S. has completely halted exports to the largest oil importer while Saudi Arabia and Russia have picked up the slack, therefore, I don’t see any reason for supplies to decline anytime soon. Looking at the technicals, crude oil has completely broken the $70 psychological support and looks to decline to the mid 60’s.
Crude Oil Dec ’18 Daily Chart