What a difference a week makes. Crude #oil is up 10% this week.
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rssCrucial Update : WTI ,BRENT -Anirudh Sethi
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Oil breaks the lows of the week in quick fall
Crude takes a tumble
WTI crude has quickly fallen to the lows of the day, down $1.82 to $38.35.
The drop breaks lows from this week and from Sept 21 that had been acting as support.
The response from the Canadian dollar so far has been mum, perhaps due to a jump in Canadian natural gas prices today. I would expect USD/CAD to rise but the market is closely watching the US stimulus front right now.
Weekly EIA oil inventory report -1980K vs +1000K expected
Weekly petroleum supply data from the EIA:
- Gasoline +683K vs -1400K
- Distillates -3184K
- Cushing +1785K
There’s been little response from the oil market.
From the API yesterday:
- Crude -831K
- Gasoline +1620K
- Distillates -3420K
Oil trader Vitol says prices have little room to rise in the next quarter because global demand growth is faltering
Weekend comments from Vitol Group executive committee member Chris Bake.
Crude prices will have little room to rise in the next quarter
- the recovery in global demand slowing due to new coronavirus-related restrictions on the economy
- conventional wisdom going into the fourth quarter was that things were going to improve … It doesn’t feel like we have a huge catalyst,” and demand is more “uncertain,”
Vitol is a Dutch energy and commodity trading company.
OPEC watching Libya oil restart closely, needs to see if sustained
Libya could tip the market into oversupply
Libya is a major wild card in the global oil market.
In late 2018, Libya was producing 1.2 million barrels of oil per day. That fell to 800K bpd at the start of this year as the civil war ramped up. Currently, exports are minimal because of a blockage by Haftar’s forces.
The general announced that exports could resume under a revenue-sharing deal but it’s not clear how much crude is going to move.
An Update :WTI ,Brent -Anirudh Sethi
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Saudi energy minister: Warns oil speculators not to bet against OPEC
More OPEC news
The Saudi energy minister is now speaking saying:
- UAE has shown its commitment to OPEC+cuts
- Warns oil speculators not to bet against OPEC.
- Exports to evolve as local consumption drops
- We don’t have to wait until December, we will be proactive
- Reaffirmed the full support, commitment to OPEC+ deal
- Output increase in August was due to domestic demand
- Tremendous increase in electricity demand in August
- Will compensate oil output in October and November
- Won’t pump above OPEC+ target this month
- To meet 100% of its OPEC+ quota in September
OPEC+ panel see pressure factors for oil
Via Reuters
- Increase in COVID-19 cases may weigh on economic recovery and oil demand
This is in line with the recent OPEC+oil market report that sees oil demand falling.
Oil finding sellers around the 50% Fib level.
Oil traders – heads up for the OPEC committee meeting today, Thursday 17 September 2020
This is the OPEC+ Joint Ministerial Monitoring Committee meeting.
Given the weak run for crude prices (past days rally excepted) there is likely to be extra scrutiny on producers not hitting compliance targets.
CAD traders will want to keep an eye out for oil-related headlines from the meeting also.
ps. I don’t have a scheduled time for any comments following the meeting. The meeting is in Vienna so i suspect some time US hours or late Europe.