U.S. Energy Information Administration Petroleum Status Report

Economic Calendar

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What is the EIA Petroleum Status Report?

The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S., whether produced here or abroad.  Inventory levels help us forecast the direction of prices for petroleum products.

Boisseauc 1646
Crude oil is an important global commodity. World map, Boisseau circa 1646

Why is the EIA Petroleum Status Report Important?

The prices of petrol products are determined by supply and quantity demanded – just like most other goods and services.

During periods of strong economic growth, we expect demand to be robust. If inventory supply is low, this will eventually lead to an increase in crude oil pricing.  Or, price increases for a wide variety of petroleum products such as gasoline or heating oil.

  • If inventories are high and rising in an environment of strong demand, prices may remain in equilibrium.
  • In a slow economic environment, demand for crude oil may fall.  And, If inventories are rising, this may push down oil prices.

Crude oil, priced in USD, is an important commodity in the global market. Prices fluctuate depending on global supply and demand conditions. Since oil is such an important part of national economies, it contributes to the direction of inflation.  In the U.S., consumer prices have stabilized whenever oil prices have fallen, but have accelerated when oil prices have risen.

The EIA report will become even more relevant if the Shanghai Futures Exchange (SHFE) subsidiary Shanghai International Energy Exchange (INE), initiates a new oil futures contract denominated in Yuan.

Sails Up

↓ EUR/$

Good CCI divergence on the charts.  The economic calendar shows good numbers on the GBP.  I expect a DXY pullback.  However the economic calendar lists pirate activity this week so will keep my position size 33% of normal with a wide stop.

Update:  position open, currently below the 1.185 stop-loss

Position stopped out;  risk capped at -7.6% of equity

↓ EUR/NOK

Daily high-test and double top off the 50 ema.  I expect the GBP and USD to apply downward pressure on the Euro.  NOK is a commodity currency.  Position sizing will be halved due to correlation with EUR/$ short.

Update:  position open, currently below the 9.366 stop-loss

Position closed, 08-24-2017:  closed out on 200 ema bounce; gain on trade +23.1% of required margin.

↓AUD/¥

Update:  took a minor short on AUD/JPY at 87.3;  closed position early due to change in retail positioning; gain on trade +15.4% of required margin.

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Sails Down

Always check the economic calendar.

All sails are down for the weekend.

Fed rhetoric is that rate hikes are not likely to happen in the relative future (relative to what exactly?).  This is the type of FedSpeak that throws an anchor around the dollar.  The dollar losing value buoyed up commodity prices resulting in higher demand for the commodity currencies (aud, cad, nok, nzd, etc…).  I will be keeping an eye out for the wave two pullback.

I always stay port-side with conservative lot sizing and wide stops when I see a pirate get-together listed on the economic calendar.

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