Recap: Since OPEC's meeting on September 28th, oil prices have risen over 7%, with both WTI and Brent futures hammering out four month highs. For the first time since June, spot WTI traded above $50 a barrel as traders continued to react to possible output freezes by some of the world's largest oil producers and to yesterday's unexpected drop in U.S. stockpiles. Adding to the supportive sentiment, are concerns about Hurricane Matthew and its impact on imports as it works its way up the east coast of the U.S.
Prices briefly turned lower after Genscape reported a build of almost 1 million barrels of oil stored in Cushing, Ok. November WTI fell to an intraday low of $49.90 a barrel, providing a buying opportunity for those traders who believe there is more upside potential. Oil resumed to the upside, with the spot contract peaking the session at $50.58. Gains were slightly pared, with November WTI settling at $50.44 a barrel, up 61 cents, or 1.2%. December Brent ended the session at $52.51 a barrel, up 65 cents, or 1.3%.
November RBOB closed at $1.498 a gallon, up half a cent, while November heating oi edged up by 1.4 cents, or 0.9%, to $1.596 a gallon.
Fundamental News: OPEC sources stated that a number of OPEC Oil Ministers and Russia's Energy Minister, all scheduled to attend an energy conference in Istanbul on October 8th-13th, are expected to meet informally during the conference. However, they are unlikely to make any new decisions.
Algeria's Energy Minister, Nouredine Bouterfa, said OPEC could cut its production at its late November meeting in Vienna by another 1% more than the amount agreed to in Algiers last month, if producers believe it is needed. He also stated that OPEC and non-OPEC members would have an informal meeting in Istanbul. He said OPEC is aiming for an oil price of $55/barrel.
The head of the EIA, Adam Sieminski, said the response of US shale production over the next two months may well impact how OPEC decides to finalize the tentative production freeze it announced last week in Algiers.
Genscape reported that crude oil stocks held in Cushing, Oklahoma in the week ending Tuesday, October 4th increased by 690,931 barrels from Friday, September 30th and by 994,230 barrels from Tuesday, September 27th.
The head of global oil at PIRA Energy, Gary Ross, said demand is strong enough that the oil market is running a supply deficit, with prices seen at over $60/barrel next year. He forecast that prices will reach the $60 to $65/barrel range next year.
A tanker on Thursday loaded the first crude export cargo at Libya's Zuetina oil terminal since late last year. A port official said the tanker was loading 800,000 barrels of oil for export to China. A Libyan oil official said national production stood between 505,000 bpd and 510,000 bpd on Thursday.
Libya's National Oil Corp denied media reports that it has completed preparations to restart one of its largest oil fields in the southwest of the country. NOC criticized media reports that the 130,000 bpd El-Feel oilfield was close to reopening.
Gasoline stocks held independently in the Amsterdam-Rotterdam-Antwerp oil terminal in the week ending October 6th fell by 17.72% on the week and by 27.76% on the year to 622,000 tons. Gasoil stocks fell by 5.39% on the week and by 19.5% on the year to 3.022 million tons, while fuel oil stocks increased by 7.71% on the week but fell by 17.84% on the year to 838,000 tons.
Early Market Call - as of 10:12 AM EDT
WTI - Nov $50.29 down 15 cents
RBOB - Nov $1.4896 down 82 points
HO - Nov $1.5839 down 1.13 cents
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