Recap: The crude market on Monday posted an inside trading day as the market weighed reports of increased oil exports from the Middle East and the G7 stocks release against the continuing concerns over disruptions to supplies due to the war with Iran. According to shipping data, crude exports from the Middle East increased above pre-war levels in four of the seven days of the final week of September despite attacks on vessels passing through the Strait of Hormuz. The oil market posted a high of $91.88 on the opening before it erased some of Friday’s gains and sold off to a low of $89.11 by mid-morning. It later retraced some of its losses and settled in a sideways trading range. The November WTI contract settled down $1.68 at $89.43. The oil market later sold off further posting a new low of $88.74 in the post settlement period. The December Brent settled down $1.93 at $100.32. The product markets ended the session in mixed territory, with the heating oil market settling up 4.41 cents at $4.5452 and the RB market settling down 6.62 cents at $3.2462.
Technical Analysis: The oil market is seen remaining in its sideways trading range as the market may find some selling pressure from the news of exports from the Middle East increasing despite the threats to tankers leaving the region while losses remain limited by ongoing disruption fears due to the war. The crude market is seen finding support at $88.74, $88.06, $85.92 and $84.24. Meanwhile, resistance is seen at $91.88, $93.27, $93.51, $93.68, $94.74, $94.87, $95.19, $96.54, $96.78, $97.22, $98.01 followed by $100.61 and $101.69.
Fundamental News: According to data from the Department of Energy, stocks of crude oil in the U.S. Strategic Petroleum Reserve fell to 283 million barrels last week, the lowest level since October 1982. The drawdowns are part of a U.S. agreement to release 172 million barrels from the facility. Additionally, the Trump administration last week said it is offering to loan energy companies 40 million barrels of oil from the SPR.
U.S. President Donald Trump signed an executive order on Monday to expand access to tax-exempt diesel. President Trump said the directive will waive the off-road requirement for tax-free diesel and allow anyone to buy the red dye diesel fuel that is used by the agriculture industry and by some off-road vehicles.
OPEC+ agreed to keep oil production targets steady for November at a meeting on Sunday, in line with expectations that further output policy adjustments are unlikely until next year. Seven core members of the group comprising the Organization of the Petroleum Exporting Countries and allies including Russia made the decision for November in a brief online meeting on Sunday. The seven members will hold their next meeting on November 1st. OPEC+ still has about 2 million bpd of output cuts in place covering most members. It needs the result of the capacity review to decide how to distribute increases and any changes to output are unlikely before 2027. A separate OPEC+ ministerial group called the Joint Ministerial Monitoring Committee, which does not decide policy, also met on Sunday to review the market. The Joint Ministerial Monitoring Committee noted that global oil markets remained volatile and tight, with a supply shortage.
IIR Energy said U.S. oil refiners are expected to shut in about 604,000 bpd of capacity in the week ending October 9th, cutting available refining capacity by 38,000 bpd. Offline capacity is expected to fall to 533,000 bpd in the week ending October 16th.
Early Market Call – as of 9:15 AM EDT
WTI – Nov $88.10, down $1.33
RBOB – Nov $3.24, down 62 points
HO – Nov $4.4326, down 11.26 cents
