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π’οΈ How to use the regular EIA report for oil tradingβ
π In the period between OPEC meetings, the weekly EIA report is considered the main informational factor. US is not only a major oil consumer (approximately 20% of the world), but also a leading oil producer, so the US balance of supply/demand can be used to assess the global market.
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Investors and analysts need the report to develop and control business strategies, while oil traders and ordinary speculators use it to forecast energy prices.
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The most important data in this report:β’ Domestic Production β a preliminary estimate of volume of production for the week.
β’ Percent Operable Utilization β refinery utilization level efficiency of oil products production.
β’ Crude Oil Inventories β an estimate of US strategic oil reserves, the most important indicator.
β’ Total Motor Gasoline Stocks and Distillate Fuel Oil Stocks β Ρurrent demand for gasoline and refined petroleum products is seasonal and weather dependent.
β’ US Crude Oil Import and Crude Oil Export of crude oil to the external market.
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If EIA report shows an increase in crude oil inventories above the forecast, then this means weak demand and additional pressure on quotes. A decrease in inventories means demand exceeds supply and pushes prices up. An increase in imports can sometimes boost inventories. At the time of publication of report, short-term speculation is possible, which can be used according to the method of trading on the news.
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Short-term transactions are most affected by the difference between forecast and actual inventory levels. For long-term strategies, EIA report indicators should be totally taken into account, along with other fundamental factors and geopolitical risks.
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The latest report and archives are available free of charge on the official EIA website.
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Profits to yβall!