Today is an important day for oil futures prices ahead of inventory data report and FOMC rate decision ending with FOMC meet.
As per American petroleum institute, crude oil and distillates stocks has been declined in the last week, whereas stock piling is witnessed in gasoline. Remember in recent months, the API reports has been more wrong then right, the markets are now ignoring these numbers.
The US energy department inventory is due for release later today, where we can expect crude oil stocks to decline. However, ahead of summer season refiners are increasing their production to meet the demand which may lead to higher stocks of gasoline and distillates.
1 . Crude Oil Inventories :-
Previous : -1.911M
Expected/Survey : -1.11oM
Actual : +2.9M
Past 6 Weeks Data :
|Jun 13, 2012||-0.191M||-1.411M||-0.111M|
|Jun 06, 2012||-0.111M||-0.488M||2.213M|
|May 31, 2012||2.213M||0.558M||0.883M|
|May 23, 2012||0.883M||0.950M||2.128M|
|May 16, 2012||2.128M||1.736M||3.652M|
|May 09, 2012||3.652M||1.971M||2.840M|
Gasoline Inventories :
DOE PETROLEUM INVNETORY DATA UPDATE:
- Crude Oil Actual: 2861K Survey: -1300K, Prior:-191K
- Gasoline Actual: 943K Survey: 1000K, Prior:-63K
- Distillate Actual: 1156K Survey: 1000K, Prior: -1724K
- Ref. utilization Actual: -0.10% Survey: 0.30%, prior: 1.00%
Data Impact: Slightly negative for crude oil prices 20.06.12,08:00 PM
2. IRAN WATCH
The market seems well-supplied with oil, and traders were not focusing on supply disruption risks posed by sanctions on key producer Iran over its disputed nuclear programme.
Brent crude ended lower on Tuesday on relief that negotiations in Moscow to defuse the dispute over Iran’s nuclear programme led to plans for technical talks to be held in Istanbul on 3 July.
A deal had not been widely expected and although experts said the sides were far apart, they welcomed the fact talks had at least not broken down completely.
If talks do eventually collapse, financial markets could be hit by fears of war and of higher oil prices because Israel has threatened to attack Iranian nuclear sites if diplomacy fails to stop Tehran getting the nuclear bomb, something the Islamic Republic denies it is seeking.
3. FOMC Press Conference Set to Create Market Volatility
Today, in addition to any announcements by the Fed which could lead to heavy volatility for oil, traders will also want to pay attention to the US Crude Oil Inventories figure, set to be released at 14:30 GMT. Analysts are predicting that US inventories fell by around 1 million barrels last week, which if true, may signal increased demand in the US which could help crude extend yesterday’s bullish trend.
FOMC Rate Decision : Actual: 0.25% Prior: 0.25%
4. Fed announcement. Market Reaction
Financial market remaining at a tenterhook will be looking for Fed announcement. We believe Fed will at least extend the operation twist program ahead of its Jun 30 deadline. On either case, “not announcing QE3” or “extension of operation twist” would be a balancing act for the market. But, at the latest, an offer of operation twist or QE3 could support the riskier assets to fly high (immediate impact), shrugging off precious metal’s safe haven appeal. Hence, before the FOMC starts, high market expectation for launch of QE3 could provide an upside jerk; while an absence of the same (most likely) could be fatal for commodities prices.
Update @ 08.30 PM
Crude oil futures held on to sharp losses during U.S. morning trade on Wednesday, after a U.S. government report showed oil supplies rose unexpectedly last week, while investors looked ahead to the conclusion of the Federal Reserve’s policy meeting.
On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded at USD82.89 a barrel during European morning trade, dropping 1.3%.
UPDATE @ 09.20 PM :
Crude oil Aug Nymex: Prices have reversed the intraday gains from a high of 84.72 and now it is at 82.41, down by -2.32%. Immediate support is at 82.30 levels, break below 82.30 would lead the prices to extend its drop until 81.40 levels. At MCX support is at 4650 levels and currently it is at 4661 levels. Break below 4650 would trigger fresh selling towards 4620 and then 4600 levels