Recap: The crude market ended the session in positive territory but off its highs as the market erased its sharp gains posted in overnight trading. The market remained well supported in overnight trading following the report on Thursday afternoon that Israeli intelligence suggested that Iran is preparing to attack Israel from Iraq within days. In follow through strength seen in the post settlement period on Thursday, the oil market rallied over $2 and retraced more than 38% of its move from a high of $77.70 to a low of $66.72 as it traded to a high of $71.45 early Friday morning. However, the market erased its gains and traded back below the $69.50 level ahead of the close. The December WTI contract posted a low of $69.39 and settled up 23 cents at $69.49. The January Brent contract settled up 29 cents at $73.10. The product markets ended the session slightly lower, with the heating oil market settling down 5 points at $2.2342 and the RB market settling down 73 points at $1.9665.
Technical Analysis: Barring any major developments in the Middle East over the weekend, the oil market is seen trading within its recent trading range ahead of the U.S. presidential election next Tuesday. The oil market is seen finding resistance at its high of $71.45, $71.92, $72.21, $72.34, $73.51 followed by $74.35, $75.28 and $75.45. Meanwhile, support is seen at $69.39, $68.30, $67.28, $66.72 and $65.99.
Fundamental News: Iran is signaling it will respond to last weekend’s Israeli strikes, a move that would extend the cycle of attacks between the two countries and risk dragging the Middle East into a wider war. The head of Iran’s Islamic Revolutionary Guard Corps, General Hossein Salami, said “We will give an unimaginable response to the enemy.” Western officials believe Iranian decision makers are now debating how and whether Iran should respond, including whether an attack should come directly or from proxies outside Iran to offer a layer of deniability. Israeli officials also believe that Iran is seriously considering a response and have warned they are willing to mount a far more aggressive attack on in response.
Baker Hughes reported that U.S. energy firms kept the number of oil and natural gas rigs operating unchanged for a second consecutive week. The oil and gas rig count held at 585 in the week ending November 1st. It reported that the number of oil rigs fell by one to 479, while gas rigs increased by one to 102.
Lyondell Basell Industries plans to run its Houston refinery at about 90% of its 263,776 bpd capacity in the fourth quarter. Kim Foley, head of Lyondell Basell Industries’ refining operations, said the company plans to permanently shut the Houston refinery in two stages, with the first in January and the second in February. Lyondell is weighing converting the refinery site and some of its units for plastics or renewable fuel production.
PBF’s CEO said this week the company is currently conducting its last major turnaround at its Chalmette refinery and expect that work to be finished in November.
U.S. manufacturing activity fell to a 15-month low in October and factories faced higher prices for inputs. The Institute for Supply Management said its manufacturing PMI fell to 46.5 in October, the lowest level since July 2023 from 47.2 in September. The ISM survey’s forward looking new orders sub-index increased to 47.1 in October from 46.1 in September.
U.S. job growth slowed sharply in October amid disruptions from hurricanes and strikes by aerospace factory workers, but the unemployment rate held steady at 4.1%, offering assurance that the labor market remained on solid footing. The Labor Department’s Bureau of Labor Statistics said nonfarm payrolls increased by 12,000 jobs in October after increasing by a downwardly revised 223,000 in September.
Early Market Call – as of 9:40 AM EDT
WTI – Dec $71.39, up $1.90
RBOB – Dec $2.0253, up 5.88 cents
HO – Dec $2.2822, up 4.8 cents
