The DoE weekly petroleum status report showed that the US commercial crude oil inventory increased by 6.49 million barrels last week, smashing consensus forecast of a 2.8 million rise.

This marks the fourth consecutive week of stockpile build-up since mid-Sep, and are now back up to 416.4 million barrels. Oil price and inventory exhibited strong negative correlations over the past five years, therefore rising stockpile is putting oil price at risk of correction.

Brent oil price has retraced to US$80 area after hitting recent high of $86.4 in early October. Technically, short-term trend has turned bearish with both SuperTrend (10,2) and 10-Day SMA both slopping downwards. Momentum indicator DMI signalled that bullish momentum is running out of steam too. By drawing a Fibonacci retracement, we can find an immediate support level at around US$80.1 area, which is the 38.2% level. Breaking down below this level will open up for more downsides towards the $78.2 (50%) and $76.2 (61.8%) areas.

In Singapore, dropping oil price is not a good news to the stock market as the oil & gas sector will probably face a deeper pullback. The market opened broadly lower following a weak US session overnight, and investors are waiting for earnings season to paint a clearer picture of future directions. Right now, some blue chip companies are trading near to 20-month low, and dividend yields are at attractive levels. Market needs positive earnings surprises to underpin negative overseas concerns.

Crude Oil Brent - Cash

Crude Oil Stocks (Net Change)

STI Earnings Calendar

Singapore Press Holdings Ltd15/10/2018Y 180.13327.80SINGAPORE
Keppel Corp Ltd18/10/2018Q3 180.17 SINGAPORE
Singapore Exchange Ltd19/10/2018Q1 190.082 SINGAPORE
CapitaLand Mall Trust25/10/2018Q3 180.03 SINGAPORE
Ascendas Real Estate Investment25/10/2018Q2 19  SINGAPORE
United Overseas Bank Ltd26/10/2018Q3 180.613 SINGAPORE
CapitaLand Commercial Trust26/10/2018Q3 18  SINGAPORE
Hutchison Port Holdings Trust30/10/2018Q3 180.02 SINGAPORE
Overseas-Chinese Banking Corp L1/11/2018Q3 180.268 SINGAPORE
Centure Corp Ltd2/11/2018Q3 18  SINGAPORE
Sembcorp Industries Ltd2/11/2018Q3 180.047 SINGAPORE
DBS Group Holdings Ltd5/11/2018Q3 180.57 SINGAPORE
Genting Singapore Ltd5/11/2018Q3 180.022 SINGAPORE
Singapore Airlines Ltd7/11/2018Q2 190.103 SINGAPORE
Singapore Technologies Engineering8/11/2018Q3 180.042 SINGAPORE
Jardine Cycle & Carriage Ltd8/11/2018Q3 180.94 SINGAPORE
CapitaLand Ltd8/11/2018Q3 180.05 SINGAPORE
ComfortDelGro Corp Ltd9/11/2018Q3 180.041 SINGAPORE
City Developments Ltd9/11/2018Q3 180.165 SINGAPORE
UOL Group Ltd9/11/2018Q3 180.12 SINGAPORE
SATS Ltd9/11/2018Q2 190.056 SINGAPORE
Singapore Telecomunications Limited9/11/2018Q2 190.054 SINGAPORE
Yangzijiang Shipbuilding (Holdings) Limited9/11/2018Q3 180.165 CHINA
Wilmar International Ltd13/11/2018Q3 180.053 SINGAPORE
Golden Agri-Resources Ltd14/11/2018Q3 180.002 SINGAPORE
Thai Beverage PCL23/11/2018Y 180.91 THAILAND

Source: Bloomberg

By Margaret Yang in Singapore

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