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Crude oil posts its best week since August

  
Analysis, Crude

The price of WTI crude oil futures are settling at $71.67. That’s up $0.73 or 1.03% from its settlement price yesterday.

The week was the best since August. Last week the price closed at $66.26. From that closing level the price was up $5.41 or 8.2%.

The high price for the week reached $73.34 during trading yesterday. The low price was Monday’s low at $66.72.

Looking at the daily chart below, the move higher on Monday and Tuesday took the price back above the 200 day moving average currently at $70.11. The settled price this week as above that level. Stay above and the new week in the buyers will look toward the higher 100 day moving average at $74.08 as the next major target (blue line in the chart below)

Crude

OPEC+ said to likely discuss pausing oil output hike for January among its options

  
Analysis, Crude

Reuters reports, citing OPEC+ sources

That shouldn’t be a surprise as it is pretty much the benchmark expectation that oil traders are looking for later today. If they do not go forward with that, I fear that we could see the ugly past few days in oil continue despite a light bounce so far today.
WTI crude is trading up a little over 2% to $67.03 at the moment.

OPEC November oil output rose 220K bpd

  
Analysis, Crude

Reuters secondary sources survey

  • OPEC had pledged to increase production by 400k bpd
  • Total production was 27.74 mbpd
  • Compliance with cuts up to 120% from 118%
Saudi Arabia and Iraq boosted output in line with the agreement along with Kuwait, the UAE and Algeria.
Output fell in Libya due to pipeline maintenance while it fell in Angola to a record low, perhaps owing to tanker schedules.

Oil retraces 50% of the omicron rout. Does OPEC really have the barrels?

  
Analysis, Crude

Oil now above $72.50

Oil now above $72.50
You could draw this one a few different ways but WTI crude is testing levels around the 50% retracement of Friday’s blow up.
Note that the 61.8% level coincides with the small bounce high on Friday. That’s going to be the key level going forward. A sharp drop like we saw Friday is the perfect time to use the fibonacci levels.
I think there’s a good argument for caution in all markets because I think there’s a natural inclination to be optimistic here. Of course, there are also the early reports about mild-to-moderate symptoms. I worry that’s premature. It feels like a race to find good news right now.
In the bigger picture, this note from J.P. Morgan is doing the rounds. It suggests that OPEC+ doesn’t have the spare capacity that it claims.
Note on oil.
That’s an idea that’s been floating around for years. It makes sense that they would want to bluff because it would help them control the market and the idea they have more oil disincentivizes capex elsewhere.
In any case, those forecast for $125 per barrel next year and $150 in 2023 is intriguing. Might have wanted to save those SPR barrels.

Saudi energy minister confirms delay to OPEC+ meetings this week

  
Analysis, Crude

The meeting times are delayed by two days

The postponement is said to “buy us some time to review things”, according to the Saudi energy minister. This means the JTC meeting will take place on 1 December and then followed by the JMMC meeting on 2 December this week.
After which, the OPEC and OPEC+ ministerial meetings will take place although given the timeline and formalities, they could fit all of that in on Thursday too. But otherwise, it means that the meetings will run through to the weekend.
 
OPEC

Weekend oil news – OPEC meetings delayed in light of Omicron variant

  
Analysis, Crude

OPEC+ is delaying its two technical meetings scheduled for Monday and Tuesday by 48 hours:

  • OPEC’s Joint Technical Committee and the Joint Ministerial Monitoring Committee (JTC and JMMC respectively), will now meet on Wednesday and Thursday (1 and 2 December).
This is in order to allow more time to assess the market in light of the new COVID-19 variant concerns.
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If you need …
  • The JTC’s role is to make an assessment of energy markets, the supply and demand balance, for OPEC ministers to consider when making cartel policy.
  • JMMC tracks the compliance of Opec+ members with their production quotas.
OPEC+ is delaying its two technical meetings scheduled for Monday and Tuesday by 48 hours:

Iran says it plans to increase oil output to 5m barrels/day

  
Analysis, Crude

Negotiations between Iran and the US, with European diplomats as intermediaries, begin on Monday, November 29, in Vienna.

Talks are aimed at reviving the nuclear accord.
Iran is making plans to once again access world oil markets (if it is successful in having sanctions removed). Comments from managing director of the National Iranian Oil Co., Mohsen Khojastehmehr, were made to the state-run Islamic Republic News Agency:
  • “Plans are in place to increase oil output to more than 5 million barrels a day” 
Comes via Bloomberg (may be gated).
Stay tuned next week for how talks are progressing.
Negotiations between Iran and the US, with European diplomats as intermediaries, begin on Monday, November 29, in Vienna.

Oil may be the cleanest way to trade covid fears but beware OPEC

  
Analysis, Crude

OPEC+ meeting is on Thursday

OPEC+ meeting is on Thursday
Joe Biden may get the lower gas prices he wanted after all, but not for the reason he hoped for.
Some trades around covid worries have proven to be though but a fairly consistent one is that covid fears curb gasoline demand. Oil is down $1.79 to $76.51 now, wiping out the post-SPR ‘buy the fact’ rally.
Oil has been stumbling lately and this won’t help. The caveat is that OPEC+ might be looking for a reason not to pump the planned additional 400k bpd and now they might have it.
On the FX side, CAD is tracking closely to WTI and with Canada’s openness to lockdowns, that’s another interesting way to look at the trade.
Again, I think it’s too early for anyone to make any kind of conclusions about this variant but by the time it’s clear the market will already ahve moved.

UK oil reserve release will be a token amount. Crude now higher on the day

  
Analysis, Crude

UK release will be a voluntary one of 1.5 million barrels

The oil reserve releases from the US, China, India, Japan and South Korea were all well-telegraphed but the surprise name on the list was the UK, which hadn’t been mentioned.
However the UK barrels are negligible. Argus reports that it will be a voluntary release from UK companies of 1.5 million barrels, citing the UK department of Business, Energy and Industrial Strategy.
Oil is now green on the day, which is going to be an embarrassment for this charade.
UK release will be a voluntary one of 1.5 million barrels
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