Recap: The oil market on Friday posted an inside trading day after it posted an outside trading day on Thursday as the market remains supported by the geopolitical tensions in the Middle East ahead of a planned resumption of ceasefire talks in the coming days. The crude market posted a low of $69.96 in overnight trading before it bounced off that level and retraced some of Thursday’s losses. The market extended its gains to over $1.70 as it posted a high of $71.92 by mid-day. The crude market later settled in a sideways trading range during the remainder of the session. The December WTI contract settled up $1.59 at $71.78 and the December Brent contract settled up $1.67 at $76.05. The product markets also ended the session higher, with the heating oil market settling up 3.58 cents at $2.2381 and the RB market settling up 5.08 cents at $2.0785.
Technical Analysis: The oil market on Monday will remain within its recent trading range unless there is some further development regarding the situation in the Middle East. The market continues to await Israel’s response to Iran’s missile attack on October 1st, while U.S. and Israeli officials are expected to restart talks for a ceasefire and the release of hostages in Gaza in the coming days. The market is seen finding resistance at $71.92, $72.34, $72.94, $74.06, $74.35, $75.28, $75.45 and $77.70. Meanwhile, support is seen at $69.96, $69.77, $69.35, $68.46, $68.17 and $65.99.
Fundamental News: Lebanon’s Health Ministry said an Israeli strike killed three journalists in south Lebanon on Friday and the U.N. refugee agency warned that Israeli airstrikes on a border crossing with Syria were hindering refugees attempting to flee the war. Meanwhile, U.S. Secretary of State, Antony Blinken, said there was an urgency to get a diplomatic resolution to the conflict, a day after he said Washington did not want to see a protracted campaign in Lebanon by Israel. Israel has used airstrikes to pound southern Lebanon, the Bekaa Valley and Beirut’s southern suburbs, and has also sent ground forces into southern Lebanon against Hezbollah. The Israeli military said jets had hit Hezbollah targets around the Jousieh border crossing in the northern Bekaa Valley, using what it said were precision munitions to reduce harm to civilians. It said Hezbollah used the crossing, controlled by the Syrian military, to transfer weapons into Lebanon. On Thursday, officials said that U.S. and Israeli negotiators will gather in Doha in the coming days to try and restart talks toward a deal for a ceasefire and the release of hostages in Gaza.
On Thursday, Goldman Sachs left its oil, natural gas, and coal price forecasts unchanged and estimated stimulus boosts to energy prices that are modest relative to bigger drivers such as oil supply from the Middle East and winter weather for natural gas. It forecasts Brent in the $70 to $85/barrel range for 2025.
Bank of America is forecasting Brent crude to average $75 a barrel in 2025 without any rolling back of OPEC+ production cuts into next year.
Baker Hughes reported that U.S. energy firms kept the number of oil and natural gas rigs unchanged this week, with the count falling by two in October. The oil and gas rig count held at 585 in the week ending October 25th. Oil rigs fell by two to 480 this week, while gas rigs increased by two to 101. For the month, the total oil and gas count was down by two rigs after gaining four rigs in September.
IIR Energy reported that U.S. oil refiners are expected to shut in about 849,000 bpd of capacity in the week ending October 25th, increasing available refining capacity by 162,000 bpd. Offline capacity is expected to fall to 599,000 bpd in the week ending November 1st and further to 454,000 bpd in the week ending November 8th.
Early Market Call – as of 8:35 AM EDT
WTI – Dec $67.31, down $4.47
RBOB – Nov $1.9693, down 10.92 cents
HO – Nov $2.1369, down 10.12 cents
