The EIA reported a 9.3 million barrel increase in U.S. crude oil inventories

Recap: Oil futures traded modestly lower Thursday, pressured after the EIA report revealed that U.S. crude supplies climbed for a fifth straight week, but found some support after news of a tentative Brexit deal offered a lift for assets perceived as risky, including oil. The EIA reported a 9.3 million barrel increase in U.S. crude oil inventories; analysts had expected a 2.8 million barrel increase. Oil prices slipped after the release of the report, but reverted to the upside on reports that a tentative Brexit deal had been reached. November WTI settled at $53.93 a barrel, up 57 cents, or 1.07%, while December Brent added 49 cents, or 0.82%, to settle at $59.91 a barrel. Prices continued to rise above settlement in late afternoon trading. November RBOB fell 0.1% to $1.6225 a gallon, while November heating oil rose 0.3% at $1.9481 a gallon.

Technical Analysis: November WTI breached resistance at $54.00, but lacked momentum above it. With WTI continuing to find support above $52.00, and its strong finish on Thursday, we would look for another push above $54.00 and for an attempt for this market to make a run at $55.00. Resistance above $55.00 rests at $55.39 and $55.70. To the downside, support is set at $53.30 and $52.60.

Fundamental News: North Dakota’s Industrial Commission reported that the state’s oil production increased by 31,000 bpd to 1.477 million bpd in August. 

Britain’s 150,000 bpd North Sea Buzzard oilfield has been fully shut down since Wednesday morning for repairs.  The field was shut earlier this month for about 10 days for repairs.  A defect on topsides pipework was repaired last week and production safely restarted.  A routine follow-up inspection identified that the integrity of the repair was subsequently compromised. 

According to the Joint Organizations Data Initiative, Saudi Arabia’s crude oil exports in August increased to 8.22 million bpd from 6.88 million bpd in July. 

The joint technical committee monitoring a global deal between OPEC and non-OPEC producers found that compliance with oil cuts for September stood at 236%.  The committee discussed weak compliance with the cuts from OPEC members Nigeria and Iraq. 

The EPA said the US generated fewer renewable fuel blending credits in September than in August.  About 1.19 billion (D6) blending credits were generated in September, down from 1.26 billion in August and 338.1 million biodiesel (D4) blending credits were generated in September, compared with 331.8 million a month earlier.

The International Monetary Fund said it saw signs of de-escalation in trade tensions between the US and China, which could reduce the damage already caused to the global economy by tit-for-tat tariffs.  Managing Director, Kristalina Georgieva, said she was encouraged by news of a tentative trade deal reached by the US and China last week but urged the world’s two largest economies to work towards a lasting “trade peace”.  He also called for countries to work together to reform the global trade system, to ensure a more peaceful and prosperous world in the future. 

White House economic adviser, Larry Kudlow, said there was momentum to finalize the initial phase of a US-China trade deal that was outlined last week and may be signed at the APEC forum next month in Chile.  He said the first phase of the China trade deal was “for real” and went beyond Chinese purchases of US agricultural products to include the opening of non-tariff barriers on agriculture.  On Wednesday, Trump initially told reporters at the White House that he likely would not sign the agreement until he met with his Chinese counterpart at APEC. 

Early Market Call - as of 8:25 AM EDT

WTI - Nov $54.42, up 48 cents

RBOB - Nov $1.6353, up 1.26 cents

HO - Nov $1.9683, up 98 points