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Hugo in HTO Trading,

LCrude: Plunges after inventory data

The further increase in LCrude inventories only serves to reinforce the oversupply history that has prevailed sentiment for months. Adding further pressure on LCrude prices, the EIA kept its 2015 and 2016 domestic oil output forecasts virtually unchanged from the previous month.

Yesterday the U.S Energy Information Administration (EIA) released its latest survey. The report was expected to show an increase in LCrude stocks with estimates at 3.73 million barrels but the actual was better than expected rising to 4.87 million barrels, triggering a sell-off.

LCrude plunged more than 4.0% on yesterday session breaching below the 10-day moving average and closing near the low of the day. The commodity is still in a bearish phase and is more than likely to test the bottom of the year. The stochastic is starting to show bearish momentum.

Expecting downward move to 44.18 on a break below previous day low at 48.04 (scenario 1).

LCrude is a CFD written over Light Crude futures.