Recap: The oil market on Tuesday continued to trend lower and breached Friday’s trading range as increased trade tension between the U.S. and China and a bearish IEA report weigh on sentiment. While, U.S. Treasury Secretary Scott Bessent said that President Donald Trump remained committed to meeting China’s President Xi Jinping in South Korea this month, last week’s announcement of China’s export controls on rare earths and President Trump’s threats of 100% tariffs and software export curbs have pressured the markets. Also on Tuesday, China announced sanctions against five U.S.-linked subsidiaries of South Korean shipbuilder Hanwha Ocean, while the U.S. and China will begin charging additional port fees on ocean shipping firms. Meanwhile, the IEA said the world oil market faces a surplus next year of as much as 4 million bpd as OPEC+ producers and non-OPEC producers increase their output and demand remains low. The crude market posted a high of $59.82 before it erased Monday’s gains and sold off to a low of $57.68. The market later bounced off its low and traded back towards the $59.00 level ahead of the close. The November WTI contract settled down 79 cents at $58.70 and the December Brent contract settled down 93 cents at $62.39. The product markets ended the session lower, with the heating oil market settling down 5.21 cents at $2.1976 and the RB market settling down 1.52 cents at $1.8286.
Technical Analysis: The crude market will weigh the bearish outlook reports and the increased trade tensions between the U.S. and China against any news of a break in the ceasefire between Israel and Hamas. It will also look for further direction from the weekly petroleum stocks reports, which are delayed by one day due to the holiday on Monday. The oil market is seen finding support at $57.68, $57.50, $56.91, $56.75, $56.67, $56.29 and $55.30. Resistance is seen at $59.68, $59.82, $60.17, $60.30, $60.92, $61.33, $61.67, $62.87 and $62.92.
Fundamental News: The IEA said world oil supply will increase more rapidly than previously expected this year and a surplus could expand in 2026 as OPEC+ members and other producers lift output and demand remains slow. It said supply will increase by 3 million bpd in 2025, up from a previous forecast of 2.7 million bpd. Next year it will increase by a further 2.4 million bpd. In the IEA’s view, supply is rising far faster than demand. The agency on Tuesday trimmed its forecast for world demand growth this year to 710,000 bpd, down 30,000 bpd from the previous forecast, citing a more challenging economic backdrop. Next year, the report implied that global supply may exceed demand by about 4 million bpd, due to growth from OPEC+ and producers outside the group such as the U.S., Canada, Brazil and Guyana, and a limited expansion in demand. That compares to about 3.3 million bpd last month.
Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least seven days rose by +8.9% w/w to 93.96 million bbl in the week ended October 10.
Israel delayed aid into Gaza and kept the enclave’s border shut on Tuesday, while Hamas fighters demonstrated their grip by executing men in the street, darkening the outlook for U.S. President Donald Trump’s plan to end the war. Three Israeli officials said Israel had decided to restrict aid into the shattered Gaza Strip and delay plans to open the border crossing to Egypt at least through Wednesday, because Hamas had been too slow to turn over bodies of dead hostages. Meanwhile, Hamas has swiftly reclaimed the streets of Gaza’s urban areas, following the partial withdrawal of Israeli troops last week. The return of Hamas taking control of Gaza’s streets demonstrates the hurdles to progressing from the initial ceasefire to a permanent settlement that would prevent a new wave of fighting. A summit co-hosted by President Trump in Egypt on Monday ended with no public announcement of major progress towards establishing an international military force for Gaza, or a new governing body.
Early Market Call – as of 8:35 AM EDT
WTI – Nov $59.10, up 51 cents
RBOB – Nov $1.8353, up 98 points
HO – Nov $2.1906, down 1.02 cents
