Recap: The crude market on Wednesday posted an inside trading day, with light volume trading, ahead of the Thanksgiving Day holiday on Thursday. The market traded sideways as a ceasefire between Israel and Lebanese armed group Hezbollah held on Wednesday after the two sides came to an agreement. The oil market retraced some more of Tuesday’s sharp losses in overnight trading after the API reported a larger than expected draw in crude stocks of 5.94 million barrels. It traded to a high of $69.37 ahead of the release of the EIA’s weekly petroleum stocks report. The market, however, gave up its early gains as the EIA report showed an unexpected build in gasoline stocks of over 3.3 million barrels on the week, while crude stocks fell by 1.8 million barrels on the week. The crude market posted a low of $68.18 ahead of the close. The January WTI contract settled down 5 cents at $68.72, while the January Brent contract settled up 2 cents at $72.83. The product markets ended the session in negative territory, with the heating oil market settling down 3.68 cents at $2.2036 and the RB market settling down 1.84 cents at $1.9734.
Technical Analysis: Similar to Wednesday’s trading session, the oil market will continue to trade sideways with light volume trading during Friday’s shortened trading session due to the Thanksgiving Day holiday. The market is seen remaining range bound between $68 and $72, barring any major news during the holiday. The market is seen finding support at its low of $68.20 and $68.05. More distant support is seen at $66.91, $66.53, $66.32 and $65.74. Meanwhile, resistance is seen at $69.37, $70.30, $71.48-$71.51 followed by $71.68 and $71.87.
Fundamental News: A ceasefire between Israel and Lebanese armed group Hezbollah came into effect on Wednesday after both sides accepted an agreement brokered by the U.S. and France. Lebanon’s army, which is tasked with helping to ensure the ceasefire holds, said it was preparing to deploy to the south of the country. The military asked that residents of border villages delay returning home until the Israeli military withdraws. While the ceasefire largely held on Wednesday morning, Israel said it identified Hezbollah operatives returning to areas near the border and had opened fire to prevent them from coming closer. The deal is likely to enable Israel to focus more closely on the conflict in Gaza, where it has vowed to destroy the Palestinian Islamist group Hamas, which led the October 7, 2023, attacks on Israeli communities.
National security adviser Jake Sullivan said the United States will start its renewed push for a Gaza ceasefire on Wednesday, a day after U.S. President Joe Biden announced a separate ceasefire between Israel and Lebanese armed group Hezbollah.
Saudi Energy Minister Prince Abdulaziz bin Salman held a meeting by phone with Kazakh Energy Minister Almasadam Satkaliyev and Russian Deputy Prime Minister Alexander Novak, who is on an official visit to Kazakhstan. The three countries stressed the importance of a full commitment to the voluntary oil production cuts agreed by OPEC+.
IIR Energy said U.S. oil refiners are expected to shut in about 145,000 bpd of capacity in the week ending November 29th, raising available refining capacity by 312,000 bpd.
The U.S. economy grew at a solid pace in the third quarter, amid strong consumer spending. The Commerce Department’s Bureau of Economic Analysis said in its second estimate of third-quarter GDP that the U.S. GDP increased at an unrevised 2.8% annualized rate.
U.S. consumer spending increased in October, suggesting that the economy maintained its strong pace of growth early in the fourth quarter. The Commerce Department’s Bureau of Economic Analysis reported that consumer spending increased 0.4% in October after an upwardly revised 0.6% advance in September. The Personal Consumption Expenditures price index increased 0.2% in October, matching September’s unrevised gain. In the 12 months through October, the PCE price index increased 2.3% after advancing 2.1% in September.
Early Market Call – as of 8:40 AM EDT
WTI – Jan $68.94, up 94 cents
RBOB – Jan $1.9277, up 2.89 cents
HO – Jan $2.2188, up 2.64 cents
