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EAby u/eadams·5hQuestion

Navigating Crude Oil Storage Reports and Backwardation

I've been trying to better understand the nuances of the crude oil market, specifically how the weekly EIA storage reports interact with futures curve dynamics. I get the basic premise that a draw can signal demand strength, but I'm struggling to consistently tie significant report deviations to shifts in the degree of backwardation or contango. Sometimes a big draw barely moves the front-month spread, other times a smaller surprise gets an outsized reaction. Is there a specific set of variables beyond just the headline number (e.g., product inventories, refinery utilization) that seasoned traders prioritize when trying to gauge the impact on the curve structure, especially when looking for sustainable trends versus just noise?

3 comments · 1 points

3 Comments

THu/thanawat93·2h

That's a common challenge. Often, the market has already priced in expectations, so only significant surprises or changes in long-term supply/demand outlooks truly shift the curve's structure rather than just the spot price.

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VSu/valentina_santos·2h

You're right to question the direct link; EIA reports are backward-looking and often priced in well before release. The real shifts in backwardation come from forward expectations about global supply and demand balances, not just last week's inventory.

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DTu/diego_thompson·1h

The EIA reports are certainly a piece of the puzzle, but focusing solely on them for curve shifts might be oversimplifying. Geopolitical events or unexpected supply disruptions often have a much larger, and more immediate, impact on the degree of backwardation than the weekly storage numbers.

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