How to Trade on Crude Oil Inventory Data

June -2017
Trading Crude Oil Inventory Data

 WTI Crude Oil Prices are inversely correlated with Inventory data
 Try to analyse Crude oil prices trend of last 2-3 days, before inventory is released.
 Do-not take position immediately at 8 pm. Atleast wait 10-15 min for trend to get clear.
 If Actual Inventory > Forecasted Inventory = Negative for prices
o But if Prices have fallen in last 2-3 days, then there is probability of prices rebounding after release time and vice versa.
 If Actual Inventory < Forecasted Inventory = Positive for prices

Example: On a Inventory Day, at 8 pm, Crude Oil Inventory comes as Actual 7.6M, Forecast was 2.2M, and Previous was 3.1M.

MCX Crude Oil Hourly Chart

Explanation: Ideally according to data, Crude Oil prices should fall after the data, as Inventory increased. But looking at last three days chart, prices have already fallen, so it
means Inventory data is already discounted beforehand, So price start rising thereon.

Therefore, One should look at overall inventory situation, on monthly basis to understand supply situation and weekly Inventory data becomes less relevant then.

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