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Oil Market Volatility, Oil Reserves Unchanged

Oil Market Volatility, Oil Reserves Unchanged

June 27, 2013

 

Thursday’s early morning session saw oil trading modestly in the Futures market. In the Asian region, a predominantly bearish sentiment spread among investors as a fresh batch of weekly inventories data was recently released by the Energy Information Administration (EIA).

 

On the New York mercantile Exchange (NYMEX), West Texas Intermediate Oil (WTI) traded at $94.42 per barrel which was down by 0.94% at the end of the trading session. Light, sweet crude oil ended at a day’s high at $95.54 a barrel. Meanwhile, Brent oil ended the trading day at $100.29, falling by 0.63%.

 

The US EIA announced that crude oil inventories remained unchanged in the week ending June 21. The total inventory stood at 394.1 million barrels, which is above the average range at this time of the year. Crude inventories rose to 396.3 million barrels earlier this month, the highest since 1981.

 

The EIA report also showed motor gasoline stockpiles increased by 3.7 million barrels, which is well above the upper limit of the average range of 855,000 barrels.

 

After a disappointing U.S. GDP growth of only 1.8% in the first quarter, oil prices edged higher. The previous estimated growth was supposed to be 2.4%.Some investors are trying to put a positive spin in this grim picture, and can be viewed from a different perspective. Reacting to a survey done by Bloomberg on crude reserves, John Kilduff of Again Capital LLC comments, “The terrible GDP number gives the Fed room to continue doing what they’ve been doing.” He added, “There probably won’t be a tapering of stimulus anytime soon after this large GDPrevision.” This is of especial interest to a binary trader as the Federal Reserve’s plan on curbing its stimulus program plays a big role in determining the general market sentiment when it comes to binary trading.

 

Crude oil prices recovered after the release of the EIA report after showing weakness in the early morning trading. Now, there’s a bullish sentiment on crude oil binary trading as prices went up by as much as 60 cents.

 

There are a lot of market movements in oil futures that could potentially be an advantage to adventurous traders. Besides, this would create countless opportunities for binary trades to go through. As chief market strategist Michael McCarthy of CMC Markets said in relation to the Bloomberg survey, “The high volatility in the weekly numbers over the last six weeks is a bit of a concern, with major draws and then replenishment. Clearly we are expecting to see declines over the next weeks and months.”

 

The crude oil market has seen highs and low in this week’s trading sessions. With the declines it experienced, traders are just not in the mood to take some risks. However, crude oil may continue gaining in the current trading week and traders are encouraged to go long on their binary trading. High returns are a possibility.

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