Recap: Oil prices bounced on Tuesday in anticipation of an extension of the OPEC lead agreement to cut back on output by some of the world’s most powerful producers. WTI rose to its highest level in a week, while Brent peaked at $62.84 a barrel, just above yesterday’s high. The rise in prices was contained on signs of higher output in the U.S; and as traders await the release of U.S. inventory numbers. Gains were pared, with January WTI gaining 41 cents, or 0.7%, to settle at $56.83 a barrel, while Brent for January delivery settled at $52.57 a barrel, up 35 cents, or 0.6%.
December RBOB rose 1.7% to $1.773 a gallon, while December heating oil added 0.2% to $1.936 a gallon.
Fundamental News: TASS news agency reported that Russia’s oil producers and energy ministry have discussed a six-month extension to global oil output cuts, which is shorter than a 9-month extension suggested by Russia’s President Vladimir Putin. Energy Minister, Alexander Novak and domestic oil producers held a meeting last week to discuss the deal, which is scheduled to expire on March 31, 2018.
Three OPEC sources stated that commodities fund manager, Andy Hall, will participate in an OPEC shale oil workshop, as the group seeks a wider range of views on the market outlook ahead of its November 30th meeting. The fund manager is among the speakers scheduled to attend the workshop at OPEC’s Vienna headquarters on Wednesday, which will gather a number of OPEC officials, including Secretary General, Mohammad Barkindo.
Westwood Global Energy Group said US output is expected to increase faster than implied by the rising rig count, which has increased from 316 rigs in mid-2016 to 738 last week, as producers become more productive per well. It forecasts an 18% increase in active rigs in 2018.
FGE warned that though supply disruptions could lead to increases in the oil price next year, the market could increase again towards 2019 if US production continued to increase. It sees production growth of about 1-1.5 million bpd in 2018 and 2019.
The National Bureau of Statistics reported that Nigeria’s oil production increased to 2.03 million bpd in the third quarter of the year, the highest since the first quarter of 2016. It was up 160,000 bpd from the previous quarter and up 420,000 bpd on the year.
Colonial Pipeline Co is allocating space for Cycle 67 shipments on Line 20, which carries distillates from Atlanta, Georgia to Nashville, Tennessee.
Euroilstock reported that Europe’s refinery output in October fell by 2.4% on the month but increased by 0.3% on the year to 10.957 million bpd. European gasoline output in October fell by 1.6% on the month but was unchanged on the year at 2.528 million bpd while middle distillates output fell by 3.5% on the month but increased by 2.6% on the year to 5.702 million bpd and fuel oil output increased by 8% on the month and by 3.3% on the year to 1.226 million bpd. European refinery crude intake in October fell by 2.7% on the month but increased by 0.7% on the year to 10.484 million bpd.
Early Market Call - as of 9:00 AM EDT
WTI - Jan $57.83, up $1.00
RBOB - Dec $1.7715, down 21 points
HO - Dec $1.9459, up 98 points
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