FYI: Following up on the heels of Wednesday night’s announcement from API that crude oil inventories had plunged in the latest week, Thursday’s update from the DoE confirmed that decline. While traders were expecting crude oil inventories to increase by 905K barrels, stockpiles actually declined by 14.5 million barrels. Yes, you read that correctly. To put that decline in perspective, since 1983 there has only been one other week where weekly inventories declined by a larger amount (1/1/99). As you can imagine, crude oil prices spiked on the news and were up by nearly 4% on the day.
Looking at the chart below, crude oil inventories are still considerably above average after rising throughout much of July and August even as that is usually a period of the year where stockpiles decline. That being said, this week’s drop reversed all of the summer’s build up. What remains to be seen is how much of this week’s decline was related to Hermine travels through the Gulf of Mexico and the east coast this week. In the short term, if you are long crude oil, this week’s drawdown is certainly welcome
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/energy-inventories-plunge/
