Recap: The crude market posted an inside trading day on Friday ahead of the OPEC+ meeting this weekend. The eight OPEC+ members could agree on Sunday to raise production in November by 274,000 bpd to 411,000 bpd, with Saudi Arabia seeking to reclaim market share. The crude market posted the day’s trading range by mid-morning as it posted a high of $61.38 in overnight trading amid the news that Iraqi Kurdistan’s exports were temporarily halted due to storage tanks reaching their capacity. However, the market later erased its gains and posted a low of $60.55 as those exports resumed and on expectations that OPEC+ will agree to a large output increase at its meeting on Sunday. The oil market bounced off its low and settled in a sideways trading range during the remainder of the session. The November WTI contract settled up 40 cents at $60.88 and the December Brent contract settled up 42 cents at $64.53. The product markets also ended the session in mixed territory, with the heating oil market settling down 72 points at $2.2363 and the RB market settling up 95 points at $1.8605.
Technical Analysis: The oil market on Monday will be driven by the OPEC+ output policy decision. The market will also seek further news on the deadline that U.S. President Donald Trump gave Hamas to reach an agreement on his plan for Gaza’s future. The crude market is seen finding support at $60.55, $60.40, $60.29, $59.98, $59.70 and $58.49. Meanwhile, resistance is seen at $61.38, $62.54, $62.70, $62.89, $63.26, $63.41 and $64.12. More distant resistance is seen at $65.40 and $66.42.
Fundamental News: U.S. President Donald Trump gave Hamas until Sunday evening at 6 P.M. EST to reach a last-chance agreement on his plan for Gaza’s future. Late Thursday, a Hamas official said Hamas had held talks with Arab mediators, Turkey and Palestinian factions to shape “the Palestinian response.”
Baker Hughes reported that U.S. energy firms this week kept the number of oil and natural gas rigs virtually unchanged. The rig count was steady at 549 in the week to October 3rd. Baker Hughes said oil rigs fell by two to 422 this week, while gas rigs rose by one to 118.
Sources stated that eight OPEC+ countries are likely to further raise oil output on Sunday with the group’s leader Saudi Arabia pushing for a large increase to regain market share and Russia suggesting a more modest increase. The sources said Saudi Arabia would prefer to see double, triple or even quadruple the increase previously agreed to for October which would amount to 274,000 bpd, 411,000 bpd or 548,000 bpd, respectively. Russia would prefer the group to raise output by 137,000 bpd in November, unchanged from the October level, to avert putting oil prices under pressure and because it would struggle to raise output due to sanctions.
Crude oil exports from Iraq’s Kurdistan region to Turkey’s Ceyhan port resumed on Friday, after a temporary halt due to “technical issues”. The exports had earlier been suspended because storage tanks reached capacity. A source said flows stopped at around 1 a.m. on Friday after the storage tanks became overloaded, leaving no space for further shipments. Another source confirmed the halt and said there was also an issue with Kirkuk blend being priced too high, complicating sales.
A massive fire erupted in a jet fuel production unit at Chevron’s El Segundo refinery near Los Angeles on Thursday night. Chevron spokesperson, Allison Cook, said no injuries were reported and all workers at the refinery had been accounted for. It was not immediately clear what caused the explosion at the facility in the suburb of El Segundo, which supplies jet fuel for Los Angeles International Airport. Local media said the refinery had been contained by early Friday.
Early Market Call – as of 8:40 AM EDT
WTI – Nov $61.51, up 82 cents
RBOB – Nov $1.8821, up 2.48 cents
HO – Nov $2.2457, up 1.08 cents
