Recap: The oil market settled lower on Tuesday after it continued to trade within Friday’s trading range. The market continued to weigh the talks held in Iran between Iranian officials and officials from Saudi Arabia, Turkey and Pakistan aimed at easing tensions in the Middle East against the continuing attacks by Yemen’s Houthis against Saudi Arabia. On Monday, Saudi Arabia, Turkey, Pakistan and Iran agreed to continue talks with a view to strengthen cooperation in peace and security. Despite the efforts to ease tensions, the Iran-aligned Houthis continued to attack Saudi Arabia’s oil infrastructure on Tuesday, as the militants launched an attack on Saudi Arabia’s Ras Tanura refinery. The crude market traded higher in overnight trading, posting a high of $102.82. However, as it failed to test its previous high, the market erased its gains and sold off to a low of $99.85 by mid-day. The market later settled in a sideways trading range. The December WTI contract ended the session down $1.86 at $99.90 and the December Brent contract settled down $1.93 at $113.88. The product markets ended the session lower, with the heating oil market settling down 13.68 cents at $4.7752 and the RB market settling down 8.09 cents at $3.1376.
Technical Analysis: The crude market is seen remaining in its recent trading range as hopes for diplomacy offset the impact of the continuing attacks by the Houthis against Saudi infrastructure. The market is seen finding support at $99.85, $98.84, $97.72, $97.07, $96.26 and $95.25. Meanwhile, resistance is seen at $102.82, $103.13, $103.92, $110.48, $110.93 and $117.63.
Fundamental News: A Qatari foreign ministry spokesperson said Iran needs to show good intentions, stop threats against Arab Gulf states and open the Strait of Hormuz for mediation efforts to succeed. Qatar, along with Pakistan, has been mediating between Washington and Tehran in an effort to end the U.S.-Israeli war with Iran.
Russian Deputy Prime Minister, Alexander Novak, said a fourth tanker with Russian diesel will depart from Russia on October 28th, following the departure of three shipments in the wake of Moscow’s supply deal with the U.S. The first tanker left on October 22nd.
Finnish President Alexander Stubb and Norwegian Prime Minister Jonas Gahr Stoere held phone calls on Tuesday with Russian President Vladimir Putin to urge him to end the war in Ukraine followed by a call with Ukrainian President Volodymyr Zelenskiy. According to Ukraine’s Volodymyr Zelenskiy, the leaders of Finland and Norway told Russian President Vladimir Putin that attacks on Ukraine’s energy and infrastructure needed to be de-escalated. The Kremlin’s readout of the call did not suggest that Russia’s President had signaled any compromise from previously stated positions.
Sources said OPEC+ oil-producing countries are likely to keep their December oil output targets steady on Sunday, in line with expectations that further output policy adjustments are unlikely until next year. The online meeting of seven core OPEC+ members, Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman, comes as Gulf members have been increasing exports that have been disrupted for months by the Iran war. Most, however, are still pumping well below their output targets. The sources said no final decision had been made.
Early Market Call – as of 9:20 AM EDT
WTI – Nov $101.77, up $1.87
RBOB – Nov $3.1270, down 1.06 cents
HO – Nov $4.8027, up 2.75 cents
