Recap: Oil rose on Thursday in volatile trading focused on Russian oil supply concerns and as the Bank of England hiked interest rates less than some had expected. Russian President Putin’s strong rhetoric pushed the oil market higher early in the session, but this economically tied commodity pared gains as equity markets dipped. Russia pushed ahead with its biggest conscription since World War Two, raising concerns an escalation of the war in Ukraine could further hurt supply. Supply constraints from the Organization of the Petroleum Exporting Countries added further support. WTI for November delivery gained 55 cents per barrel, or 0.66% to $83.49. November Brent gained 63 cents per barrel, or 0.70% to $90.46. RBOB October delivery gained 2.92 cents per gallon, or 1.17% to $2.5157, while ULSD for October delivery gained 7.77 cents per gallon, or 2.33% to $3.4115.
Technical Analysis: WTI tried to rally once again but succumbed to external economic pressures. The pattern of sideways trading between the range of $90 and $80 remains in effect, and we have seen some extremely volatile trading sessions within this range. Given the grim economic outlook, we can’t see this market making too much progress to the upside and therefore believe that we will get the break below $80 that we have been waiting for. Support below $80 rests at $70.35 and $65. On the upside, resistance can be seen at the downward slopping line, which comes in at $86.19 for Friday’s session. A break above this line opens up the opportunity for this market to test the top of the aforementioned trading range.
Fundamental News: Insights Global reported it estimates gasoil stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) area rose by 1.8% on the week ending September 22nd. The increase was driven by higher imports into the region. Insights noted that demand for gasoil also rose on the week, with increased barge activity moving from ARA hub further up the Rhine and into France. Gasoline stocks meanwhile dropped by 1.5% due in part to exports to Africa and North America.
Reuters reported Norway’s Troll C oilfield was shut for four hours Wednesday afternoon.
The U.S. Labor Department reported that the number of initial unemployment benefit claims in the week ending September 17th increased to 213,000 from 208,000 in the previous week. The four week moving average of claims fell to 216,750 from 222,750 in the previous week. The Labor Department reported that the number of continuing unemployment benefit claims fell to 1.379 million in the week ending September 10th from 1.401 in the previous week.
The Conference Board said Thursday its Leading Economic Index fell 0.3% last month after decreasing by 0.5% in July. This was slightly more than market expectations had been for the report.
The U.S. Commerce Department reported that the U.S. current account balance was -$251.1 billion in the second quarter, up from -$282.5 billion in the first quarter.
Early Market Call - as of 8:40 AM EDT
WTI - November $80.64, down 28 cents
RBOB - October $2.3964, down 1.19 cents
HO - October $3.2842, down 1.27 cents
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