Recap: The oil market traded higher on Tuesday as it weighed the impact of sanctions on Russia’s oil supply and the news that the Trump administration had started interviewing for the next Federal Reserve chairman. The crude market continued to retrace Monday’s early gains and breached its previous low as it posted a low of $59.31 in overnight trading. However, the market retraced its losses and rallied sharply higher. The market was supported by the White House statement that U.S. President Donald Trump is willing to sign legislation to impose sanctions on Russia as long as President Trump retains the final authority over its implementation. The market briefly rallied more than $1 to a high of $60.92 in afternoon trading after President Trump announced the Federal Reserve chair interviews. The oil market breached a resistance line at $60.73 and retraced more than 62% of its move from a high of $62.59 to a low of $58.12 as it rallied to its high. The December WTI contract ended the session up 83 cents at $60.74 and the January Brent contract settled up 69 cents at $64.89. The WTI contract later traded to a new high of $60.93 in the post settlement period. The product markets ended the session higher, with the heating oil market settling up 15.41 cents at $2.7011 and the RB market settling up 92 points at $1.9993.
Technical Analysis: The crude market on Wednesday will remain in its recent trading range, as it remains supported by sanctions that are disrupting Russian crude flows as well as the impact of the continuing drone attacks by Ukraine on Russia’s energy infrastructure. The market will also look to the latest weekly petroleum stocks reports which are expected to show steady crude stocks. The oil market is seen finding support at $59.31, $58.71, $58.67, $58.12 and $57.34. Meanwhile, resistance is seen at $60.93, $61.06, $61.28, $61.50, $62.17 and $62.59.
Fundamental News: Crude loadings at Russia’s Novorossiysk port are about two to three days behind schedule as damage caused by a November 14th Ukrainian attack has limited the capacity of a key jetty at the terminal. The Black Sea port of Novorossiysk and a neighboring Caspian Pipeline Consortium terminal suspended oil exports on Friday after the attack. Novorossiysk resumed crude loadings on Sunday.
On Monday, BP said it responded to a release of refined products on the Olympic Pipeline System east of Everett, Washington, and had partially restored part of the system. The BP-operated Olympic shut its pipelines in the area after the discharge on Sunday. The segment of the pipeline system that was not impacted by the issue was restored on Sunday, resuming product delivery on that line. BP said the incident is still under investigation.
Marathon Petroleum reported emissions from an aromatics unit No. 2 fugitives F-170 at its 631,000 bpd Galveston Bay, Texas refinery on November 17th. Separately, Marathon reported an emissions event at its 133,000 bpd El Paso refinery linked to the shutdown of a main fractionator reflux pump, which forced the company to begin shutting down process units to stabilize the plant. Marathon also reported unplanned flaring at its 365,000 bpd Carson, California refinery on Sunday as it works to finish upgrading the facility.
Valero reported an upset at its delayed coking unit 843 at its 380,000 bpd Port Arthur, Texas refinery that caused a brief flaring event on Saturday.
Early Market Call – as of 8:30 AM EDT
WTI – Dec $59.08 down $1.59
RBOB – Dec $1.9489, down 4.39 cents
HO – Dec $2.5864, down 10.86 cents
