Recap: RBOB futures performed an about-face on Thursday, after reaching a 7-week low on Wednesday. The threat of a strike in Nigeria lifted both products and oil as well, as traders scrambled to cover shorts put on after the EIA reported larger than expected builds in U.S. inventories for both gasoline and heating oil. January gasoline continues to hold above the long standing ascending trend line, but worked its way back above the 50-day moving average, which is currently set at $1.6808. Based upon this activity, we would look for January RBOB to work its way back toward resistance set at $1.7312. Support is set at $1.64.25, which is provided by the previously mentioned trend line.
Oil prices also reversed course on short covering due to the possibility of a strike in Nigeria. Today’s correction keeps WTI within the upward channel that can be depicted on a daily spot continuation chart, which keeps the main trend to the upside. We would look for a run at $57.59, the 10-day moving average. Above this level, additional resistance is set at $58.90. To the downside, support rests at $55.38 and $54.53.
Brent futures rose 98 cents, or 1.6 percent, to settle at $62.20 a barrel, while U.S. WTI gained 73 cents, or 1.3 percent, to settle at $56.69.
Fundamental News: Kuwait’s Oil Minister, Essam al-Marzouq, said he expects oil markets to rebalance by the third quarter or early fourth quarter of next year.
Qatar’s Energy Minister, Mohammed al-Sada, said oil is moving towards a fair price and the level of global stocks is declining and moving towards the level sought by OPEC. He also said an agreement between OPEC and non-OPEC producers to reduce output to help balance the market had been successful.
The White House said US President Donald Trump will meet with Republican senators on Thursday to discuss his commitment to the Renewable Fuel Standard. The President and senators will discuss how to address Renewable Fuel Standard program’s impact on independent refiners.
The Petroleum and Natural Gas Senior Staff Association of Nigeria, one of the country’s two main oil unions, threatened to launch a nationwide strike from December 18th over what it said was a mass sacking of workers that joined the union.
Credit Suisse raised its 2018 oil price forecasts citing strong OPEC adherence to pledged output cuts, which the bank said could normalize OECD inventory levels next year. Credit Suisse raised its 2018 Brent price forecast to $60/barrel from $53/barrel and its WTI forecast to $56/barrel from $50.50/barrel.
Nigeria’s oil exports in January are expected to fall from a 21-month high reached in December. Crude oil exports of 1.76 million bpd are scheduled for January on 62 cargoes, down from 1.94 million bpd in December.
The Kurdish Regional Government resumed shipments of crude by pipeline from the Shaikan field in northern Iraq, increasing flow through the link. Oil received at the Ceyhan terminal in Turkey from the Kurdish region increased to 300,000 bpd in the 24 hours to Monday morning and has remained at that level. Separately, Iraqi forces and Kurdish Peshmerga fighters on Sunday started a second round of talks to resolve a conflict over control of the Kurdistan region’s border crossings.
Iraq’s Oil Minister, Jabar al-Luaibi, said Iraq managed to increase its oil export capacity from its southern ports to 4.6 million bpd after adding a new floating terminal in the Gulf.
Early Market Call - as of 9:17 AM EDT
WTI - Jan $57.72 up $1.03
RBOB - Jan $1.7223 up 2.23 cents
HO - Jan $1.9324 up 3.54 cents
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