Actual 0.6m, Expected 2.4m, Previous 4.1m
Release Explanation: This is the DOE (Department of Energy) Crude Oil Inventory, EIA (Energy Information Administration) Weekly Oil Inventory. It measures changes in crude oil production, refinery inputs and utilization, production by product; current inventory level of crude and related products as well as an estimate of how many days of supply is currently available. Increasing or decreasing inventory figures leads to an adjustment of price action that in time will spread throughout the economy.
Currently, it is estimated that for every one percent of GDP growth, oil consumption increases by one quarter to one third of a percent, so oil inventories must be able to increase along with the economy or another gasoline shortage may occur. It is also worth noting that at an average price of $75.00 a barrel, the U.S. spends one billion dollars a day on crude.
Crude oil price is on the same level as interest rates when it comes to its impact on the economy. It affects every release. The product is responsible for much of our trade deficit; it is used throughout the product/service cycle, and also has a significant impact on consumer spending as well as inflation. The initial affect on the U.S. dollar tends to be the inverse of oil prices. For example, higher oil price leads the greenback lower since it suggests higher trade deficits and a possible decrease on consumer spending. However, the real impact of oil prices (and inventory levels) is felt farther down the road as prices influence headline and core inflation.
Forex Technical Reaction: Oil futures rose after the report; the 30 minute chart looks to have found support at $54.00. Stocks are on a roller coaster ride after the ADP employment report came in better than expected. The dollar is holding ground against the majors.