Matadors of the Oil Kingdom

By: Peter Haralambakis / October 24, 2017

As Saudi Arabia is determined to end the oil glut around the world, the snorting, red eyed bull continues its charge towards price levels that haven’t been seen in over 6 months.  As of 12:45pm EST, WTI for December delivery is up almost 1% at $52.40.  November HO is up $0.0146 at $1.8024 and RBOB is up $0.0246 at $1.7029.  The Saudis continue to prod the bull and reiterate the “do anything” mentality to get oil inventories back to the 5-year average.  Saudi Energy Minister Khalid al-Falih said to Reuters, “We have reduced the inventories by over 180 million barrels and we still have about 160 million barrels according to numbers I have seen last.”  The focus remains on reducing the level of oil stocks in OECD industrialized countries to their five-year average he said.  With continued geopolitical tension between Iraq paramilitaries and the Kurds, Southeast Asia oil demand growing until at least 2040, and U.S. crude inventories expected to have fallen for a 5th week in a row, the channel-top of $53.87 continues to be within reach. 

CL Continuation-15.png

A settlement today above $52.97 should yield the $53.87 and then $54.90 formation by the end of this week.  However, the managed money net long has more than doubled in four months with the price rising about 25% in WTI and 30% in Brent crude.  That puts net long holdings equal to 16% of total open interest.  The average was 9% in the past five years. 

open interest capture.jpg

For now we shall wait and see how many times the “Matadors of the Oil Kingdom” can prod the bull before it turns around and shapeshifts into a growling, swatting bear.  Until then, we await tonight’s API and tomorrow’s DOEs for a clearer picture into the delicate rebalancing of our global oil inventories.

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.


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.


Contact Us