Daily Alert – Wednesday 24th November 2021: Oil reserves release underwhelms

Mark NugentNov 2021

Daily Alert – Wednesday 24th November 2021: Oil reserves release underwhelms

Good morning traders.

The main event yesterday was the announcement of the release of strategic petroleum stocks by the US. Without going into gruesome detail, the market was underwhelmed. WTI moved up significantly (in relief) and my WTI long is now well in the money. We await what, if any, response there is from OPEC. If they do nothing oil will probably continue to rise. If they cut back on their last production increase, oil will rise. This is what I mean by risk being skewed to the upside. Heads you win, tails you win.

Overall risk sentiment was moderately risk-on, but the calculation was driven largely by the US 10-year yield, with equities being mixed. When I don’t see equities reflecting the sentiment, I need to be cautious about using this tool in trading decisions.

Later today we have the FOMC Meeting Minutes which will be analysed with the usual intensity. Perhaps more importantly, we have the Fed’s favoured measure of inflation, the Core PCE Price Index. With the current obsession with inflation, this could easily move the market.

Happy trading.

We’ll be back tomorrow.

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