March crude oil rallied over 3 dollars today as Russia makes another attempt to get OPEC to discuss production cuts. They were joined by other non- OPEC producers pleading for an emergency meeting as low oil prices are ruining their economies. Crude rallied into the EIA report this morning, trading to just under 31.00 before plunging to the day session lows at 29.74 on much larger than expected builds in inventory of both crude oil and gasoline.
The EIA reported crude inventories rose 7.79 million barrels and gasoline by 5.9 million barrels. These figures are much larger than the expected 3.8 million barrel build for crude and 2 million barrel build for gasoline. Cushing also increased by 75,000 barrels. US crude inventories are at levels last seen in 1930. Inventories are above 5oo million barrels. US production fell 7,000 barrels per day and traders took this to mean that output in the US is finally rolling over.
Shorts were squeezed and it led to a route. The dollar getting trounced also helped buyers. NY Fed President Bill Dudley said today that the deterioration of financial conditions could change the Fed’s monetary policy decision. March crude surged throughout the remainder of the day, settling at 32.28 at the 1:30 close and it continued to climb after the close, ending the electronic session at 32.75.
CLH16
High – 32.75
Low - 29.40
Last - 32.75
Pivots for 2/3/16:
R2 34.98
R1 33.87
PIVOT 31.63
S1 30.52
S2 28.28