Crude oil futures are expected to finish the week lower in a move solidified by the release of a bearish U.S. stockpiles report on November 12. Government data showed the seventh consecutive weekly build in crude stockpiles, driving futures prices into their lowest levels since late August.
According to the U.S. Energy Information Administration, crude oil inventories rose by 4.2 million barrels to 487 million in the week-ending November 6. The surge in inventories was well above trader estimates of a 1 million barrel rise. Total crude oil inventories are now within striking distance of the modern day record high of 490 million barrels reached in April.
The news out of Cushing, Oklahoma was also bearish with the key futures hub showing a 2.237 million barrel increase in supply. This was the biggest weekly increase since March 2015.
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Technically, the main trend is down according to the weekly swing chart. After two weeks of consolidation, the selling pressure was strong enough to take out the closing price reversal bottom formed the week-ending October 30 at $43.52.
The market is also in a position to finish the week on the bearish side of a key retracement zone at $46.01 and $44.58. This is another sign of increasing selling pressure. If the downside momentum continues then the late August bottom at $39.97 becomes a reasonable downside target.
With three weeks to go before the OPEC meeting…