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Macro economic releases provide the quantitative numbers that help the market to define its direction. Traders have to watch these releases very closely and have to be aware of the time they will be released. There are a lot of releases that can influence oil prices. Every indicator provides information about economic growth in a certain area, and economic growth means an increased demand for oil. However, there are two releases particularly influencing crude oil prices; (1) crude oil inventories and (2) natural gas storage. These two indicators will now be explained.
Crude Oil Inventories (USD)
The crude oil inventories is released every Wednesday at 14:30 GMT by the Energy Information Administration (EIA). The number represents the weekly change in the number of barrels held by commercial firms, including domestic and customs-cleared foreign crude oil in transit to refineries. This release generally brings a lot of volatility into the market. The reason is simple; if current stocks are higher than expected then demand is likely to decrease on so will the price of a barrel. The opposite is true also, smaller than expected inventories will create stronger demand and thus the price will go up.
Trading the release can be a dangerous activity. Prices can suddenly go up or down a 100 pips, but these moves often are false and prices can jump back within a (very) short time. Some brokers freeze the price for a few minutes around the time of release to prevent unfulfilled orders. We advice traders to wait at least 15 minutes after the release to let the market decide how to respond to the new number. There will be plenty of pips to be won if you ride the trend afterwards.
The latest version of the release can be found under this link. http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/txt/wpsr.txt
Natural Gas Storage (USD)
This release can be considered the little brother of the crude oil inventories release. While the number does not tell us anything about the demand for crude oil directly, it does so in an indirect way. The number is released every Thursday at 14:30 GMT (also by the EIA), and represents the weekly change in the number of cubic feet of natural gas held in underground storage. A sudden drop in storage numbers indicates an increased energy demand which can have its effect on oil prices. This release generally does not generate as much volatility as that of its bigger brother, but surprises in the release can set off a price rally.
