Short-term trading still seems the best way as we approach the OPEC meeting (1Hour => 15m has been just great, but wearisome watching!)…but which means there is less to actually talk about!
It is becoming difficult in the oil markets to understand why do organisations insist on reporting data which is not only contradictory to each other and but also totally out of line with the so-called “experts’” opinions. Is it that the data compiled by the organisations is so unreliable or that the industry analysts don’t know how to compile it - or are they simply looking at different things? I mean, how difficult is it to add up the content of crude storage vessels at a certain date? Apparently very difficult!
Yesterday’s API release on oil stocks reported a build of 882,000 barrels in US crude oil inventories, compared to analyst expectations for a draw of 2.3 million barrels for the week ending May 12. Not only are these figures wildly different, but in totally different directions…let’s see tonight if the EIA is any closer to either of these figures!
But the end result is we get headlines like these three, from the same author, only a few weeks apart:
Oil Markets Whipsawed As API Reports Unexpected Crude Build - Apr 25, 2017
Bullish API Data Prevents Oil From Falling Further - May 02, 2017
Oil Prices Slip After U.S. API Reports Build In Crude Stocks - May 16, 2017
OK, comment on issues like the likely impact on future stock levels and prices from OPEC developments, etc is educated opinion, but Oil stocks are current, concrete, factual data - so why are these reports so unreliable and, if unreliable, why bother reporting on them, or trade according to them?
But, that is the nature of the trader animal, the elusive carrot and the eternal herd. It is hungry and wants feeding, and will eat whatever it is given - good, bad, or indifferent. And others are paid to feed it…if nobody stirs the spoon we all get bored and go home hungry!
We are close to the OPEC meeting now, and, as we already saw at the weekend, we can expect to see the surprise rabbits being pulled out of the hat. Russia and Saudi Arabia already pulled out the “extending the agreement beyond the anticipated year-end”. There will no doubt be more of the same on and before the day…or should we say that if there is not more of the same then where will oil prices go then!
The one thing that is for sure, oil price will continue its fluid dynamics in every which way it can - catch it if you can!
Whilst in the meantime the US just keeps on pumping like crazy!