Recap: The oil market ended the session lower, with some geopolitical premium from Ukraine’s continued strikes on Russian refineries offset by the market’s concerns about an oversupply and the large build in crude stocks and weak demand. The market retraced some of its previous losses in overnight trading as it traded to a high of $60.51 amid reports that Ukraine struck a Russian refinery. However, the market erased its gains amid the concerns of a supply glut. The market was further pressured by the news that Saudi Arabia lowered its December official selling price of crude bound for Asia. It sold off to a low of $58.83 by mid-morning before it once again retraced some of its losses and traded towards the $59.50 level ahead of the close. The December WTI contract settled down 17 cents at $59.43 and the January Brent contract settled down 14 cents at $63.38. The product markets ended the session in positive territory, with the heating oil market settling up 6.36 cents at $2.4961 and the RB market settling up 5.63 cents at $1.9656.
Technical Analysis: The oil market is seen remaining in a sideways trading range as the market weighs the concerns of an oversupply and lower demand against the geopolitical issues that remain in the background. The market is seen finding support at $58.83, $58.49, $57.34, $56.35 and $55.96. Meanwhile, resistance is seen at $60.51, $61.09, $61.50, $62.17 and $62.59.
Fundamental News: S&P Global Commodities at Sea data is showing that diesel and gasoil exports out of the U.S. Gulf to Europe reached a new all-time high in October reaching 1.7 million mt, besting the prior record of 1.6 million mt set back in August 2024. Demand for U.S. distillates has grown given the new U.S. and EU sanctions on Russia along with heightened Ukrainian drone attacks on Russian refineries recently. S&P Global Commodities at Sea has also estimated that Russian exports of diesel and gasoil for the week ending November 3rd stood at just 382,000 mt, down some 38% from the prior week.
Russia’s Finance Ministry data showed that the country’s oil and gas revenue fell by almost 27% in October to 888.6 billion roubles or $10.93 billion from the same month a year earlier, amid weak oil prices and a strengthening rouble.
Insights Global reported that gasoline stocks independently held in the Amsterdam-Rotterdam-Antwerp refining and storage hub in the week ending November 6th increased by 10.55% on the week but fell by 5.7% on the year to 1.058 million tons, while gasoil stocks fell by 3.21% on the week but increased by 7.59% on the year to 2.198 million tons and fuel oil stocks increased by 15.34% on the week but fell by 15.87% on the year to 1.06 million tons. Naphtha stocks increased by 11.81% on the week but fell by 6.69% on the year to 530,000 tons and jet kero stocks increased by 0.37% on the week and 16.83% on the year to 1.083 million tons.
Chicago Federal Reserve President, Austan Goolsbee, said the lack of official data on inflation during the government shutdown “accentuates” his caution about cutting interest rates further.
Cleveland Federal Reserve President, Beth Hammack, said ongoing high levels of inflation argue against the U.S. central bank cutting interest rates again. She said the Fed continues to face inflation pressures that are above its target and that monetary policy is currently at a setting barely restrictive of economic momentum, which means it is not doing a lot to help push down price pressures that exceed the central bank’s 2% target.
Early Market Call – as of 8:30 AM EDT
WTI – Dec $59.95, up 42 cents
RBOB – Dec $1.9720, up 1.57 cents
HO – Dec $2.5384, up 4.2 cents
