top of page

Economic Events: Crude Oil Inventory



What is the Crude Oil Inventory Report?

Every week the EIA (Energy Information Agency) publishes a report of the stockpiles of unrefined petroleum by the barrel. Governments and the producers themselves use these stockpiles to even out the swings in supply and demand. The report can be affected by many things: political events, OPEC (Organization of the Petroleum Exporting Countries) choices and other factors.

Why is the crude oil inventories report essential for traders?

Crude Oil is one of the most popular futures contracts to trade; the two main contracts are (Light Sweet) Crude Oil Futures Contract (CL) at 1,000 barrels and the E-Mini Crude Oil Futures Contract (QM) at 500 barrels of oil. Especially to Day traders and Swing traders, trading this futures contract means looking at the short-term fluctuations in price, which is easily affected by the Crude oil inventory report. When studying the Oil Inventory report we are looking for inventory levels, the higher the inventory, the lower the price.

Crude Oil markets are notorious for their fluctuations and volatility, and the Inventory Report by the EIA usually impacts the market immediately. Like with most news events, we are looking for the difference between the actual and the expectation, we also want to pay attention to the weekly differences in the reports. If a lower than expected stockpile is reported and demand becomes high, we can estimate that there will be a rise in prices. Alternatively, if stockpiles are reported above expectations, and crude oil stockpiles have repeatedly been rising, oil prices can drop.

It's important to note that the Crude Oil Inventory report should be watched by almost all futures traders no matter what market or markets they trade in, since the fluctuations in the oil markets affect almost all currencies, primarily the USD as well as other commodities.

What’s in a Name?

WTI (West Texas Intermediate) is a light, sweet crude oil blend. ‘Light’ refers to its low density and sulfur content, ideal for conversion to gasoline and diesel fuel. The contract’s ticker symbol, CL, refers to “Crude Light.”

CONTRACT SIZE: 1,000 barrels

MINIMUM TICK: $0.01 per barrel

DOLLAR VALUE OF ONE TICK: $10 U.S. Dollars

PRODUCT SYMBOL: CL

TRADING HOURS: Sunday - Friday 5:00pm - 4:00pm CT with a 60-minute break each day at 4:00pm CT

CONTRACT MONTHS: All

TRADING VENUE: CME offers electronic trading almost 24 hours /6 days a week

OPTIONS AVAILABLE: Quarterly, Monthly, Weekly

12 views0 comments

Recent Posts

See All
bottom of page