Key Macro Chart: When Will the Disconnect Between Inventory Signals and Oil Prices End? (2024/10/18)
This report analyzes the dynamics of the silver and crude oil markets. Silver is approaching a key resistance level near $32.50, which may be broken through. Despite record-breaking US oil production, analysts point out that the data may not be accurate, and actual production levels may differ. EIA crude oil inventory data shows a decrease of 27 million barrels in total liquid inventories, with the gap between the three major US inventory data and the 2016-19 average reaching the largest in 7 months. Seasonal inventories have dropped to the lowest level in 8 years, with a 2.8% increase in four-week average demand
Silver Breakthrough Imminent
Analyst: Silver is once again approaching the key resistance level of $32.50. With gold breaking through the consolidation range to achieve a historic high, the possibility of silver breaking through is even greater.
U.S. Oil Production "Moisture"
Analyst: Many are discussing the EIA's U.S. weekly crude oil production data hitting a "new record" (13.5 million barrels per day). However, I want to remind everyone: the weekly crude oil production data is known to not be entirely accurate. The deep blue line in the chart represents monthly data, while the light blue line represents weekly data. At best, it is just a forecast— U.S. production "may" further increase, but this is not confirmed.
Inventory Level Signal
HFI Research: Analyzing the past 4 EIA crude oil inventory reports, total liquid inventories including SPR have decreased by approximately 27 million barrels.
Inventory Level Signal II
According to the data in the chart, the gap between the three major U.S. inventory data (crude oil + gasoline + distillate inventories) and the 2016-2019 average has reached the largest in 7 months (indicated by the yellow arrow). Simultaneously, seasonal inventory levels have dropped to the lowest in at least 8 years, while four-week average demand has increased by 2.8%. This may go against the mainstream view— but it is definitely not a bearish signal.
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