Recap: The crude market posted an inside trading day ahead of the long U.S. Labor Day holiday weekend and settled lower as the market weighed the uncertainty over Russian supply caused by the lack of progress in ending the war in Ukraine and expectations of lower demand as the summer driving season comes to an end. The oil market gave up some of Thursday’s late gains, which had been driven higher by expectations of President Trump making a statement regarding the Russia-Ukraine situation after White House Press Secretary Karoline Leavitt said President Trump was not happy about Russian attacks on Ukraine. The market, however, traded higher and posted a high of $64.55 early in the morning before it sold off to a low of $63.88, with light volume trading. The October WTI consolidated its trading in a narrow trading range ahead of the close and settled down 59 cents at $64.01. The October Brent contract settled down 50 cents at $68.12. The product markets ended the session lower, with the heating oil market settling down 4.31 cents at $2.2667 and the RB market settling down 1.15 cents at $2.1876.
Technical Analysis: The oil market on Tuesday will continue to trade within its recent trading range, barring any major news over the long weekend, as the market awaits further development on ending the war in Ukraine. The market will also trade sideways as the market expects lower demand as the summer driving season comes to an end and we head into the fall. The market is seen finding resistance at $64.55, $64.70, $64.76, $65.10 and $65.71. Meanwhile, support is seen at $63.88, $63.64, $63.47, $63.35, $63.19, $62.95, $62.74 followed by $62.52, $61.83, $61.65 and $61.45.
Fundamental News: Russia’s Foreign Ministry spokeswoman, Maria Zakharova, said proposals for security guarantees for Ukraine must take into account Russia’s concerns. She added that current Western proposals were aimed at containing Russia and turning Ukraine into a “provocateur” on its border, which she said would heighten the risk of military conflict with Moscow.
Iran’s Oil Minister, Mohsen Paknejad, said a return of sanctions under the so-called “snapback” will create restrictions on oil sales but Iran has learned to bypass them and exports won’t be shut in.
According to a Reuters survey, oil prices are unlikely to gain much traction from current levels this year as increasing output from top producers adds to the risk of a surplus and U.S. tariff threats cut demand growth. A survey of economists and analysts forecasts Brent crude will average $67.65/barrel in 2025, little changed from July’s $67.84 forecast. WTI crude is seen at $64.65/barrel, compared with last month’s $64.61 estimate. The survey showed that global oil demand is seen growing by between 500,000 and 1.1 million bpd in 2025.
The EIA reported that U.S. crude oil production increased by 133,000 bpd in June to a record high of 13.58 million bpd. U.S. crude oil exports increased by 133,000 bpd to 3.762 million bpd in June from 3.629 million bpd in May, while total refined oil product exports increased by 333,000 bpd to 3.356 million bpd in June from 3.023 million bpd in May. U.S. product supplied of crude oil and petroleum products increased in June by 684,000 bpd to 21 million bpd, the highest level since October 2024. Gasoline demand increased 205,000 bpd in June to 9.23 million bpd, its highest level since July 2024, while jet fuel demand reached its highest level since August 2018, gaining 84,000 bpd to 1.85 million bpd.
IIR Energy reported that U.S. oil refiners are expected to shut in about 318,000 bpd of capacity in the week ending August 29th, increasing available refining capacity by 135,000 bpd.
Early Market Call – as of 9:25 AM EDT
WTI – Oct $64.97, up 96 cents
RBOB – Oct $2.0225, up 5.43 cents
HO – Oct $2.3370, up 6.62 cents
