EIA Petroleum Report

Released on 1/11/2012 10:30:00 AM For wk1/6, 2012 Prior Actual Crude oil inventories (weekly change) 2.2 M barrels 5.0 M barrels Gasoline (weekly change) 2.5 M barrels 3.6 M barrels Distillates (weekly change) 3.2 M barrels 4.0 M barrels Once again we see a build in all 3 and increasing, this may be due to the Iranian situation as the EIA has already agreed to release strategic reserves if it becomes necessary.  There was a pretty sharp spike down on volume at the 10:30 release, however we had already identified what appeared to be intraday accumulation in USO and more specifically energy. We can never know for sure, but I would suspect that the EIA report (which in my experience tends to be one of the most leaked reports out there) was leaked and a short term trade was conceived in accumulating near the lows of the morning and then on the release to run an intraday bounce. It doesn't really matter what the report said in this case of an intraday trade, the point is the supply of shares would have been there on the cheap and being able to accumulate in bulk on the spike down at the report release would not be seen as tipping their hand as someone has to take the other side of the trade.  The 1 min 3C chart confirms what I suspected as you an see 3C making a higher low at the 10:30 release of the report, so those shares dumped by longs or shorted (both are selling) were accumulated for an intraday run up, I would guess the gap down today will be the upside target. The 5 min chart shows NO accumulation so it wasn't that heavy, it suggests the intraday move we are seeing and we still have the negative 10 min and 15 min capping the move. This may present a short trade opportunity as soon as they have distributed their long position (they would likely go short after that). So we'll watch for a trade opportunity in USO. As for longer term traders short energy/crude, this should not be anything that will effect the negative atmosphere shown earlier in the larger trend.