Recap: The oil market continued to trend lower on Thursday, extending its losses for the fourth day, due to concerns about oversupply in the market ahead of an OPEC+ meeting over the weekend. The market retraced some of its losses in overnight trading and posted a high of $62.54 amid concerns over more disruption to Russian crude exports after the Group of Seven nations said they will take steps to increase pressure on Russia by targeting those who are continuing to increase purchases of Russian oil. The market was also supported by a Wall Street Journal report of the U.S. planning to provide Ukraine with intelligence for long-range missile attacks on Russian energy infrastructure. The market, however, gave up its gains and continued to trend lower after the Kremlin said that the U.S. already provided Ukraine with intelligence. The market also remained pressured by the expected OPEC+ output increase in November as it extended its losses to $1.38 and posted a low of $60.40 in afternoon trading. The November WTI contract settled down $1.30 at $60.48 and the December Brent contract settled down $1.24 at $64.11. The product markets ended the session lower, with the heating oil market settling down 5.84 cents at $2.2435 and the RB market settling down 3.49 cents at $1.8510.
Technical Analysis: The crude market on Friday will likely retrace some of its losses before it continues on its downward trend ahead of the OPEC+ meeting over the weekend. The market will also remain driven by the geopolitical tension. The market is seen finding support at $60.40, $60.29, $59.98, $59.70 and $58.49. Meanwhile, resistance is seen at $62.54, $62.71, $62.89, $63.26, $63.42 and $64.13.
Fundamental News: The Kremlin said that the United States and the NATO military alliance already supplied Ukraine with intelligence on a regular basis after reports that Washington would provide intelligence on Russian energy targets to Kyiv. On Wednesday, the Wall Street Journal reported that the United States will provide Ukraine with intelligence for long-range missile strikes on Russia’s energy infrastructure, as it weighs whether to send Kyiv weapons that could put more targets within range. The United States has long been sharing intelligence with Kyiv but the report said the new development will make it easier for Ukraine to hit refineries, pipelines, power stations and other infrastructure with the aim of depriving the Kremlin of revenue and oil. According to the newspaper, U.S. officials are also asking NATO allies to provide similar support. Earlier on Wednesday, the Group of Seven nations’ finance ministers said they will take joint steps to increase pressure on Russia by targeting those who are continuing to increase their purchases of Russian oil and those that are facilitating circumvention.
Russia’s President Vladimir Putin said that the global economy would suffer without Russian oil, warning that prices would increase to over $100/barrel if its supplies were cut off. Separately, Russia’s President Vladimir Putin said that Russia will respond swiftly if it thinks Europe is provoking it and said that almost all of the U.S.-led NATO alliance was now fighting against Russia over Ukraine.
OPEC produced 28.4 million bpd in September, up 330,000 bpd from August’s revised total, with UAE and Saudi Arabia making the largest increases.
Crude oil flows from Iraq’s Kurdistan region to Turkey’s Ceyhan port are running at around 180,000 bpd, up from 150,000-160,000 bpd earlier in the week after they resumed on September 27th for the first time in 2½ years. The first tanker loading of Iraqi Kurdistan crude from Ceyhan since the restart will take place on Thursday. They said the tanker, Vallesina, will load 700,000 barrels of crude.
Colonial Pipeline is facing an outage on all three of its main delivery lines. The outage began around 5 a.m. ET on Thursday and was attributed to “computer issues”.
Early Market Call – as of 8:40 AM EDT
WTI – Nov $60.66, down 2 cents
RBOB – Nov $1.8620, up 1.04 cents
HO – Nov $2.2353, down 1.10 cents
