Commodity Focus: Crude Oil

Ole Hansen

Head of Commodity Strategy

Summary:  In today's commodity focus we take a closer look at crude oil which trades unchanged on the day and close to its five-month average ahead of the weekly US storage report at 1430 GMT

WTI crude oil trades close to its five-month average at $55.50/b ahead of the 'Weekly Petroleum Status Report' from the U.S. Energy Information Administration at 1430 GMT. An hour earlier in Europe than normal after the clocks were changed at the weekend. The range bound behavior these past few months highlights the uncertainty in a market where slowing demand growth is being off-set by the potential for additional production cuts from the OPEC+ group of producers.

Despite the struggle to find fresh momentum hedge funds did return as net-buyers of Brent and WTI crude oil for the first time since mid-September last week. However, the skepticism about oil's ability to break higher was highlighted by the gross-short which rose to the highest since January. Overall the combine net-long in WTI and Brent rose by 13k to 302k lots, this following a 52k lots reduction during the previous four weeks.


Source: Saxo Bank

Focus ahead of today's inventory report has been the potential price supportive drop in crude stocks. This after the American Petroleum Institute (API) last night reported a 1.7 million barrel drop in crude stocks. A drop would be counter to the seasonal trend for this time of year where a slowdown in refinery demand leaves more crude oil unused. 

API results and EIA survey
The answer to a potential drop in crude stocks may be explained by the continued rise in U.S. exports which reached a near record 3.7 million barrels/day in the previous week. Countering the positive impact of an overall reduction in crude stocks is the expectations for a fifth consecutive rise in stocks at Cushing, Oklahoma, the delivery hub for WTI crude oil futures traded in New York. 
EIA report in charts

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Pty Ltd ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide and Product Disclosure Statement to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as CFDs and Margin FX products may result in your losses surpassing your initial deposits. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.
Please click here to view our full disclaimer.