Recap: The crude market traded higher on Thursday, retracing some of the sharp selloff seen earlier this week due to a stronger U.S. dollar and concerns over slow demand growth. The market posted a low of $67.92 in overnight trading as the dollar rallied to a one-year high. However, the oil market retraced slightly more than 38% of its move from a high of $72.88 to a low of $66.94 as it posted to a high of $69.39 early in the session. The market later gave up some of its gains in light of the EIA reporting a larger than expected build in crude stocks of over 2.1 million barrels on the week. Meanwhile, the IEA forecast hat global oil supply will exceed demand in 2025 even if the OPEC+ output cuts remain in place. The December WTI contract later settled in a sideways trading range during the remainder of the session and ended the session up 27 cents at $68.70. The January Brent contract settled up 28 cents at $72.56. The product markets ended the session mixed, with the heating oil market settling down 70 points at $2.2123 and the RB market settling up 1.66 cents at $1.9817, in light of large draw of over 4 million barrels in gasoline stocks.
Technical Analysis: The oil market is seen trading in a sideways trading range after it bounced off its previous low and continued to hold support above its trendline. While the market may see some selling pressure following the larger than expected build in crude stocks, its losses are seen limited ahead of the weekend, with its stochastics trending sideways. Support is seen at $67.67, $66.94, $66.72, $65.99 followed by $64.49 and $64.16. Meanwhile, resistance is seen at its high of $69.39, $69.91, $70.56-$70.61 followed by $72.25 and $72.88.
Fundamental News: The EIA reported that U.S. gasoline stocks fell by 4.4 million barrels in the week ending November 8th to 206.9 million barrels, the lowest since November 2022. U.S. East Coast gasoline stocks fell by 2.8 million barrels to 51.3 million barrels, the lowest level since April 2023 and U.S. Midwest gasoline stocks fell by 800,000 barrels to 43.5 million barrels, the lowest level since November 2023.
The International Energy Agency said in its monthly oil market report that the world’s demand for oil will fall short of supply by more than 1 million bpd in 2025 even if OPEC+ cuts remain in place. The IEA left its 2025 oil demand growth forecast little-changed on the month, expecting oil demand to increase by 990,000 bpd next year. Weak Chinese demand continues to weigh on global oil demand growth. The IEA saw China’s third-quarter consumption 270,000 bpd below the same period for 2023 after six consecutive months of contractions up to September. The IEA also made a slight upward adjustment to its 2024 oil demand growth forecast, up by 60,000 bpd on the month to 920,000 bpd, on higher than expected gasoil demand in OECD countries in the third quarter.
BP said that it has redeployed personnel to facilities in the Gulf of Mexico and is in the process of returning to normal operations after operations were halted due to Hurricane Rafael. The hurricane dissipated last weekend after entering the Gulf on November 6th.
Chevron redeployed all personnel to its Gulf of Mexico facilities and is continuing to restore production that was shut-in for Hurricane Rafael.
ExxonMobil reported to state regulators Wednesday that its 564,440 b/d Baytown refinery on Tuesday had experienced emissions exceeding permitted levels due to a pinhole leak on its FCCU3 line.
Platts reported the 435,000 b/d BP Whiting refinery is expected to return to service at the end of the week from its maintenance outage that began during the third week of September.
Operators at HF Sinclair’s 162,000 b/d El Dorado refinery said earlier this week the refinery which has been down for maintenance since September would be back in operation by November 14th. But some market participants expect this outage to be extended until November 22nd.
Early Market Call – as of 8:40 AM EDT
WTI – Dec $68.28, down 42 cents
RBOB – Dec $1.9800, down 17 points
HO – Dec $2.2013, down 1.1 cents
