Yesterday, the API released quite bullish inventory data which showed a large draw in crude (-6.4MM vs -2.2MM exp.) — the biggest draw since August. WTI futures rallied sharply on the news, while RBOB bumped a little higher before settling back down.
This might be discouraging to those shorting oil and gas. But, the EIA will be releasing its own data shortly. And, the two sources often disagree.
The other factor worth considering is that the last time we had an API-reported draw this big (mid-August) CL proceeded to sell off about 10%. And, speculative net longs are at an all-time high. It should be an interesting day.
USDJPY is about to tag its SMA100/200. If our thesis is correct, the reaction will give CL/RBOB all the cover it needs to nosedive.
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