Another Jolt by OPEC

By: Peter Haralambakis / October 10, 2017

West Texas Intermediate for November delivery received another zap to the upside courtesy of our friends from the Organization of the Petroleum Exporting Countries.  As of 12:30pm EST, Light Sweet Crude Oil is up almost 3% at $51.00, HO is up $0.0361 at $1.7713, and RBOB is up $0.0321 at $1.5915.  A plethora of headlines with one main theme, OPEC doing everything it can to keep prices afloat and stabilize the oil markets:  “OPEC confident that market is rebalancing after years of oversupply”, “Saudi Arabia to cut crude allocations for November”, “OPEC considers second meeting with U.S. independent oil firms to discuss potential involvement”,  and “OPEC signals possible deal extension”.  Markets are piggy-backing all these headlines to the upside, but the one that is most influential would be the Saudis cutting their November allocations by 560k bpd.  The kingdom is restraining not only the production volume but even more importantly exports.  Exports are what ultimately shape global inventories and market balances.

CL Continuation-13.png

Technically, crude has staged a 4% rally from its most recent lows and seems to be on track for the short-term channel-top of $53.36 a barrel over the next 3 -5 days.  As the “bullish stars” align, we still must venture into 2018 with uncertainty of continued production cuts, increased U.S. production, and OPEC’s delicate dance of exiting their current production deal.  All of which may lead to the re-emergence of oversupply and a renewed rise in crude stocks.  But for now, we await a delayed by one day DOE Weekly Petroleum Status report on Thursday for a better indication of what the markets entail for the upcoming weeks.  Reuters POLL shows U.S. crude inventories down for a 3rd straight week:

Stats Capture.jpg

For now we must wait and see which direction the next major headline jolt takes us.


Categories: Daily Market Update


Peter Haralambakis

Written by

Peter Haralambakis

Peter Haralambakis is a Supply and Trading Business Development Manager at Guttman Energy with over 13 years of experience in commodities trading, analysis, and risk management in products ranging from Corn and Soybeans to Crude Oil Futures and Options to Financial and Physical Biofuels to Natural Gas and Natural Gas Liquids.


Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


Comments

Subscribe to our blog

Price Feed

Stay up-to-date on current fuel prices and market trends with our NYMEX price feed (15 minute delay to the live market).

© 2018 Market data provided and hosted by Barchart Market Data Solutions. Fundamental company data provided by Morningstar and Zacks Investment Research. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.

Categories

Contact Us