Thursday, 9 February 2017
3 reports to trade oil futures
Posted by Fort Financial Services at 02:46
Oil, also known as “black gold”, it’s nowadays one of the most profitable assets out there. Crude oil futures are volatile as hell and can offer high returns in short periods of time. However, you can also lose it all really fast if you are not careful enough. In case you’re interested about trading crude futures, you should keep into account that fundamental news play a huge role in price dynamics. Here are three events that you should start monitoring every week:
The American Petroleum Institute (API) is a trade association that represents producers, refiners and distributors of the US oil and gas industry. The API has been releasing a Weekly Statistical Bulletin on crude and refined products stockpiles since 1929. While these figures are not official, traders use them to anticipate official results, which come a day later. The weekly report is usually out on Tuesday at 21:30 GMT and Asian traders are the first ones to react on the news. According to data, the API report has proven an accurate correlation with official data in 80 percent of cases. However, there have been cases when both reports showed completely different trends. In these scenario, EIA data prevails.
The US Energy Information Administration releases each Wednesday its Weekly Petroleum Status Report at 15:30 GMT. However, keep in mind that if Monday is a holiday, the report is published on Thursday. This report is probably the most important one of all the rest. It displays how US shale producers are doing and what are they trying to achieve in the near future. For instance, let’s take the current example of OPEC’s output cut agreement. As the oil group decided to reduce oil production, US drillers are working harder to eat up OPEC’s market share, therefore, inventories tend to grow very quickly.
How to trade the report:
1) Increasing Crude Inventories > WTI and Brent move downwards = Go short
2) Decreasing Crude Inventories > WTI and Brent move upwards = Go long
Baker Hughes Oil Rig Count
If you wanted extra evidence to probe actions of US producers, then look at Baker Hughes Oil Rig Count. Also, a weekly report that displays the number of oil rigs working in US territory. As a matter of fact, in recent times, US drillers have been increasing the number of platforms as they try to counteract OPEC efforts to rebalance the market Data is out on Friday at 17:00 GMT.
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