Recap: Oil prices slipped on Friday after Baker Hughes reported that the number of U.S. oil rigs rose this week, stemming the downward trend of recent weeks. According the report, the count for the week ending Nov. 3, rose by 9, with the number of oil rigs set at 738, versus 452 a year ago.
Both WTI and Brent traded within a narrow range under moderate volume, most likely due to the celebration of the U.S. Veteran’s Day holiday. At the beginning of the week, oil prices rose to their highest levels since 2015, bolstered by geo-political turmoil and expectations OPEC will continue to cut back on output through 2018. This week marks the fifth week in a row that oil prices have risen.
December RBOB fell 0.73 cent, or 0.4%, to $1.8124 a gallon, while logging a 1.1% weekly rise, with futures gaining for five consecutive weeks. December heating oil declined 1.2 cents, or 0.6%, to end at $1.9349 a gallon, marking a 2.6% weekly gain and booking its fifth weekly climb in a row.
Fundamental News: Baker Hughes reported that oil companies added nine oil rigs in the week ending November 10th, bringing the total count up to 738. US energy companies added the most oil drilling rigs in a week since June.
Iraq’s oil exports from its northern Kurdish region to Turkey’s Ceyhan port were steady at 312,000 bpd on Friday. Oil flow increased from 192,000 bpd on Wednesday.
UAE Energy Minister, Suhail bin Mohammed al-Mazroui, said oil producers will have little difficulty making a decision later this month on extending the OPEC and non-OPEC output cut deal. He told the Saudi-owned Al Hayat newspaper that “the market needs a bit of a correction and no one is talking about not extending the cut”.
Saudi Arabia plans to cut oil exports to all regions it ships to next month. The country’s Energy Ministry stated that shipments will fall by 120,000 bpd in December from November. Bloomberg calculations estimated October flows at 6.989 million bpd.
Qatari Energy Minister, Mohammed al-Sada said oil is moving towards a fair price and the level of global stocks is declining and moving towards the level sought by OPEC.
Oil Movements reported that OPEC shipments are expected to increase by 680,000 bpd to 24.13 million bpd in the four week period ending November 25th, compared with the four week period ending October 28th. Middle East shipments, including those from non-OPEC countries, Oman and Yemen, are estimated to increase by 70,000 bpd to 17.23 million bpd.
IIR reported that US oil refiners are expected to shut in 1.006 million bpd of capacity in the week ending November 10th, increasing available refining capacity by 425,000 bpd from the previous week. IIR expects offline capacity to fall to 397,000 bpd in the week ending November 17th.
According to Bloomberg, global refinery outages reached 2.58 million bpd in the week ending November 9th, down from 2.82 million bpd in the previous week.
S&P Dow Jones Indices adjusted the weightings for its S&P GSCI commodity index for 2018, raising its energy sector weighting to 58.58% from 56.24% in 2017. WTI crude oil will remain the largest weight in the 24-commodity index and have the largest percentage weight increase. The new weightings will become effective on January 8, 2018.
Early Market Call - as of 9:00 AM EDT
WTI - Dec $56.82, up 8 cents
RBOB - Dec $1.8091, down 35 points
HO -Dec $1.9315, down 31 points
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