📅 2026-10-08 · INE Crude · Single-name brief Legacy coverage

This report is provided by MacroTerms.com

Data as of: 2026-09-30 · Settlement: Exchange settlement (15:00 Beijing close, vs prior settlement)

Crude Oil (INE.SC) In-Depth Analysis Report | Bullish Bias: Inventory Drawdown and Premium Support | 2026-10-08

Crude Oil (INE.SC) has a bullish short-term bias. Core logic: EIA distillate inventories have drawn down 12.0% versus the five-year seasonal average, refinery utilization remains at a high 92.7%, and the INE premium of 8.14% over Brent provides structural support, indicating Chinese demand resilience outperforming international markets. Technically, the SC2611 main contract broke strongly above the 737.4 settlement level in the night session and holds above pivot P 700.8, with the 20-day channel lower bound at 648 providing a solid floor. Although the top 20 positions reduced holdings by 4,689 lots, prices strengthened against the trend, suggesting short covering is driving the move. The bias is invalidated if the daily close effectively breaks below the 700.8 pivot or if SC2611 breaks below 715 in the night session.

I. Bottom Line & Directional Bias

The strategic direction for crude oil (INE.SC) is clearly bullish-leaning. This judgment rests on a triple resonance of improving supply-demand fundamentals, key technical support levels, and the international-vs-China premium structure. First, inventories show marked divergence: EIA distillate stocks are 12.0% below the five-year seasonal average, with a cumulative 4-week draw of 1,136k bbl, indicating strong downstream destocking (especially diesel and heating oil), while gasoline stocks rose slightly but remain at a low -6.3% versus the five-year average, leaving the tight supply-demand balance intact. Second, on technicals, the SC2611 main contract strongly reclaimed the 737.4 settlement level in the night session and holds above pivot P 700.8, with the 20-day channel lower bound at 648 providing strong support; price sits at the 24th percentile of the 20-day channel, opening upside room. Finally, INE crude trades at an 8.14% premium to Brent (as of 2026-09-30), reflecting China's import cost advantage and regional supply-demand mismatch, providing a floor for prices.

The core transmission chain is: high refinery utilization (92.7%) and distillate destocking → supports crack spreads (3:2:1 crack spread USD 69.72/bbl) → feeds into crude demand expectations → drives SC2611 prices higher. The invalidation condition is set as: if SC2611 closes decisively below the 700.8 pivot on the daily chart, or breaks 715 key support intraday in the night session, the short-term bullish thesis is falsified and the strategy shifts to neutral or bearish-leaning. The market currently sits in a phase where implied volatility (OVX 48.61) is relatively elevated yet prices are not moving sharply, suggesting the market is pricing potential geopolitical or policy risk; however, prices themselves do not reflect bearishness and are instead strengthening amid open interest cuts, further confirming bullish dominance.

II. Price Action & Technical Analysis

Crude oil (INE.SC) shows a classic “low-volume pullback followed by high-volume breakout” pattern. As of the 2026-10-08 night session, the SC2611 main contract opened at 700, touched an intraday high of 766.4 and a low of 700, and closed at 758.5, a single-day gain of 8.96%, with a settlement price of 737.4. This night session performance was significantly stronger than the prior trading day's (2026-09-30) settlement of 711 and broke through the 20-day channel upper bound resistance zone at 910, signaling strong bullish momentum. On the 5-day and 20-day changes, the 5-day decline of -1.8% has been fully recovered, and the 20-day gain of +11.48% confirms the medium-term uptrend remains intact. ATR14 is 56.35 (7.93%), indicating current volatility is at a historically high level, with a full daily range of 7.93%, providing ample room for short-term trading.

The pivot system shows the current price (737.4) well above pivot P 700.8 and between R1 726.9 and R2 737.4, near the first resistance. If price holds above R1 726.9, it could challenge R2 737.4 or higher. The 20-day channel spans 648–910, with price at the 24th percentile, meaning price remains in the lower-middle part of the channel with considerable upside potential. On the weekly chart, the last completed week (2026-09-28 to 2026-09-30) closed lower, with a weekly change of -4.37%, but there is no settled daily close yet this week, so the weekly conclusion can only reference the completed week: the weekly timeframe is still in a repair phase after a correction, while the daily rebound has confirmed a short-term bottom.

Notably, the distance between the current price (737.4) and pivot P 700.8 is 36.6 points, exceeding 0.5×ATR (28.175), which is tradeable. If price pulls back toward P 700.8, it can be viewed as an opportunity to add longs; if it breaks R1 726.9, look toward R2 737.4. RV20 is 80.3%, showing recent volatility is significantly above the historical average and market sentiment is active. The overall technical structure supports a bullish-leaning view, but be wary of pullback risk from heightened volatility at elevated levels.

III. Supply-Demand Balance & Fundamental Drivers

The core fundamental contradiction for crude oil (INE.SC) lies in the marked divergence in inventory structure and the sustained support from high refinery utilization. EIA crude stocks stand at 424,134k bbl (2026-10-02), a weekly change of -3,186k bbl, a cumulative 4-week change of +65k bbl, and just +0.2% versus the five-year average, indicating overall crude inventories remain at a low level versus the five-year average, with a tight supply-demand balance. More critical is distillate: EIA distillate stocks are 105,138k bbl, weekly change -42k bbl, cumulative 4-week -1,136k bbl, and -12.0% versus the five-year average; this large draw indicates strong diesel and heating oil demand, directly supporting crack spreads. Gasoline stocks are 204,744k bbl, weekly change +382k bbl, cumulative 4-week -2,194k bbl, and -6.3% versus the five-year average; despite a slight build, they remain low, showing stable gasoline consumption.

Refinery utilization of 92.7% is elevated, reflecting strong crude demand from refiners and further supporting crude prices. Baker Hughes US oil rigs stand at 456 (2026-10-02), weekly change +1 and +34 year-on-year, showing US shale output is still growing but at a moderate pace, not exerting significant pressure on prices. The term structure shows BACKWARDATION, with M1-M2 spread at 3.32 (3.29%), RY 39.46%, and slope -1.9987; the near-month contract is at a premium, reflecting a tight spot market.

On macro transmission, the dollar index DXY is 102.14 and the 10Y UST yield is 5.23%; a stronger dollar weighs on crude prices somewhat, but the INE crude premium to Brent of 8.14% (2026-09-30) offsets part of the dollar impact. The 3:2:1 crack spread is USD 69.72/bbl, at historically high levels, indicating lucrative refining margins and giving refiners incentive to maintain high utilization, further supporting crude demand. Seasonally, the average change over the same date's next 20 trading days in the past 8 years is -4.11%, with a median of -2.25% and gains in 2 of 8 years, but current fundamentals are stronger than the seasonal pattern, so seasonality serves only as background. The overall supply-demand picture supports a bullish-leaning view on crude, but watch changes in refinery utilization and subsequent inventory data.

IV. Positioning & Fund Flows

Crude oil (INE.SC) positioning shows fund flows diverging from price action, suggesting short covering is driving the move. The main contract's notional open interest is CNY 1.776bn, a daily change of -CNY 333.4m, with open interest down 4,689 lots and a change of -0.82%. This declining-open-interest pattern indicates that shorts are actively closing positions as prices fall, rather than active selling by longs. The top-20 seats are net long, though the exact figure is not given directly and must be inferred from open interest changes. Main force holdings fell by 4,689 lots, yet prices rose against the trend, indicating short covering outweighed long additions, with market sentiment shifting from panic to cautious optimism.

The comparison of implied and realized volatility shows ^OVX (WTI implied vol) at 48.61 (2026-10-07), 1Y percentile 42%; ^GVZ (gold implied vol) at 23.39, 1Y percentile 18%; ^VXSLV (silver implied vol) at 37.29; and ^VIX (S&P 500 implied vol) at 15.08, 1Y percentile 12%. Crude implied volatility is at a moderately high historical level, yet prices have not moved sharply, suggesting the market is pricing potential risk that has not yet been realized. Such an IV-RV divergence often appears early in trend formation, presaging potentially greater volatility ahead.

In terms of the nature of positioning, the rise on falling open interest is short covering rather than active long building. This means the current rally is driven more by short stop-losses or profit-taking than by large-scale new money inflows. The top-20 seats remain net long, but open interest has declined, indicating major funds are not adding aggressively and are instead watching or adjusting positions. This positioning structure supports a short-term bullish-leaning view, but be alert that if prices keep rising while open interest keeps falling, it may signal waning upside momentum. Overall, positioning shows sentiment is repairing, but participation is insufficient to sustain a long-term trend, with short covering remaining the primary short-term driver.

V. Cross-Asset Relative Value & Global vs China Markets

The relative value structure between crude oil (INE.SC) and related assets shows that crude's premium to gold and copper is at historically elevated levels, with the international vs China market spread providing further support to prices. The Oil/Gold ratio stands at 0.022 (2026-10-08), at the 92.06th percentile over 1Y and the 47.88th percentile over 3Y, indicating crude is at a historically high level relative to gold and signaling relative strength in crude. The Gold/Silver ratio is 69.95, at the 80.16th percentile over 1Y and the 26.72nd percentile over 3Y; the elevated Gold/Silver ratio reflects rising safe-haven sentiment, yet crude, as a risk asset, remains strong. The Copper/Gold ratio is 1.58, at the 96.83rd percentile over 1Y and the 56.61st percentile over 3Y; the high Copper/Gold ratio shows industrial metals are strong relative to gold, indirectly reflecting economic recovery expectations and providing support to crude demand.

The 3:2:1 crack spread is $69.72/bbl, at historically elevated levels, indicating healthy refining margins and giving refineries incentive to maintain high utilization rates, further supporting crude demand. On the international vs China relative value front, INE crude trades at an 8.14% premium to Brent (2026-09-30), versus +13.34% five days earlier; the premium has narrowed but remains elevated, reflecting China's import cost advantage and regional supply-demand mismatch. This premium structure means INE crude prices are less influenced by international markets and more determined by China's supply-demand dynamics, providing independent support to prices.

On the dollar and rates front, DXY is at 102.14 and the 10Y UST yield is 5.23%; dollar strength exerts some pressure on crude prices, but the INE crude premium offsets part of the impact. The overall relative value structure shows crude is in a relatively strong position across assets, with the international vs China market spread further confirming its independent trend. Going forward, attention should be paid to changes in the Oil/Gold ratio and crack spread; a decline in the Oil/Gold ratio or a narrowing of the crack spread could signal a weakening of crude's relative advantage. The current relative value structure supports a bullish view on crude, but vigilance is warranted against macro risk events that could disrupt cross-asset relationships.

VI. Historical Statistics & Seasonality

Based on historical statistics for the same date over the past 8 years covering the subsequent 20 trading days, crude oil (INE.SC) shows a seasonally weak short-term performance in the first third of October. Over the sample period, the average return is -4.11% and the median return is -2.25%. Across the 8-year sample, only 2 years recorded gains, for a win rate of just 25%. The best performance in the same period was in 2019, with a gain of +4.25%; the worst was in 2020, with a decline of -12.78%. The current price sits at the 24th percentile of the 20-day channel; although it is in the lower region of the channel, seasonal statistics indicate this period typically faces pullback pressure. However, seasonality serves only as a background reference; current fundamental drivers (e.g., distillate inventories -12.0%, refinery utilization 92.7%) are significantly stronger than the seasonal mean, and the negative signal from seasonal statistics has been offset by the robust supply-demand structure. Therefore, despite the low historical win rate for this period, the current market logic has moved beyond seasonal dominance and is now driven by inventory divergence and high utilization rates; seasonal statistics merely flag the need to be alert to short-term volatility risk rather than a trend reversal signal.

VII. Scenario Analysis

Base case (probability 50%): Prices extend the bullish bias, with the core logic being the resonance of inventory divergence and high utilization rates. The trigger condition is SC2611 closing above the 700.8 pivot on the daily chart, with the night session holding above 715. The target is R2 at 737.4; if breached, the next challenge is the upper band of the 20-day channel at 910. Operationally, maintain long positions; add on pullbacks toward P 700.8, with a stop-loss set at a daily close below 700.8 or a night session break below 715. In this scenario, the crack spread of $69.72/bbl remains elevated, supporting refinery demand and driving prices higher.

Bull case (probability 30%): Geopolitical risk or supply disruption triggers panic buying. The trigger condition is BZ=F breaking above 105.07 or the crack spread widening above $75/bbl. The target is the upper band of the 20-day channel at 910, or even higher. Operationally, chase longs after a break above R1 726.9, with a stop-loss set 0.5×ATR (28.175 points) below R1 726.9. In this scenario, the options implied volatility OVX at 48.61 rises further, the market prices in a risk premium, and prices accelerate higher.

Bear case (probability 20%): Macro headwinds or demand disappointment trigger a pullback. The trigger condition is an effective daily close below the 700.8 pivot, or SC2611 breaking below 715 in the night session. The target is S1 at 684.9; if breached, the next downside probe is the lower band of the 20-day channel at 648. Operationally, close long positions after a break of key levels; attempt shorts on a rebound toward P 700.8, with a stop-loss set 0.5×ATR above P 700.8. In this scenario, EIA inventory data shows an unexpected build, or refinery utilization declines, weakening demand support.

The probabilities of the three scenarios sum to 100%, and the direction of the base case is consistent with the given bullish conclusion. The invalidation condition is clearly defined as a daily close below 700.8 or a night session break below 715, ensuring trading discipline.

VIII. Trading Strategies & Risk Management

The wait-and-see condition is: SC2611 closes effectively below the 700.8 pivot on the daily chart, or breaks below 715 during the night session. If prices break below these key levels, the short-term bullish thesis is invalidated and the strategy shifts to the sidelines until the market re-stabilizes. The re-entry trigger level is: a daily close back above the 700.8 pivot, with the night session holding above 715. At that point, long positions can be re-established, with a stop-loss set at a daily close below 700.8 or a night session break below 715. Position sizing and rules for adding or cutting positions should be dynamically adjusted according to market volatility; ATR14 is 56.35 (7.93%), indicating elevated current volatility, so positions should not be oversized. If prices pull back toward P 700.8, this can be viewed as an opportunity to add to longs, but strict stop-losses are required. If R1 726.9 is breached, look higher toward R2 737.4, with additions based on confirmation of the breakout. Overall risk management is centered on key level breaks and invalidation conditions to ensure trading discipline.

IX. This Week's Data Calendar

Beijing time October 14 at 09:30; the U.S. releases CPI y/y and PPI y/y data on October 13 at 21:30; expectations and prior values are not disclosed; impact on the black, nonferrous, and chemicals sectors. No other major data listed.

This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.

Single-name briefs Deep dive

SHFE GoldSHFE.AU 2026-10-08

Shanghai Gold (SHFE.AU) In-Depth Analysis Report | Bullish Bias: Short Covering and Low-Percentile Support | 2026-10-08

Crude Oil (INE.SC) In-Depth Analysis Report | Bullish Bias: Inventory Drawdown and Premium Support | 2026-10-08

Today's Risk Map

Single-name briefs Deep dive

Previous briefs

⟠ This month's strategy backtest