In what might be a new trend, EIA reported oil inventories at 10:30 a.m. today with a draw of 2.68 mm bbl vs consensus of 2.79 mm bbl draw, just like last week when oil jumped at 4:30 on the API data, it fell Wednesday morning on the EIA data, it's a near spitting image of last week.
I don't think it was the slight miss on the draw that sent oil lower (
it gained a bit on the slightly weaker overnight $USD) , but rather a build in product inventories like gasoline and distillates.
Just like last week, API sets them up and EIA knocks them over.
We've been expecting USO to come down further, here's yesterday's crude futures update,
Crude Futures
As for USO's charts...
USO intraday leading negative trend
Interestingly a negative divergence in to the EIA inventories this week just like last week on the 10th.
And the reason I still expect more downside, the 15 min USO chart with a leading negative divergence suggesting it has more work to do inside the base before it's ready for a potential and probable primary trend change to the upside that can actually hold.
USO puts and the equity short remain open.
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