Crude Finishes October Down, Focus On Demand

Oil prices fell over 1% on Tuesday following the sharp decline the previous day to finish October down, the first monthly drop since June. Higher US inventories and a stronger dollar (USD index +0.4%) weighed on prices. Also the market has refocused on the demand outlook especially with the Fed decision scheduled for later today and US payrolls on Friday. The conflict in the Middle East seems contained with Hamas offering to release more hostages in coming days and the US and Israel talking about a peacekeeping force to replace Hamas.

• WTI fell 1.2% to $81.35 to be down 8.4% in October. It reached a peak of $83.37 in the NY morning and then trended lower from there following stronger US data. $81 provided some support with breaks below only brief including the intraday low of $80.74. Key support is $80.20, October 6 low.
• Brent is 1.1% lower at $85.44/bbl to be down 5.4% in October. It broke below $85 briefly to make a low of $84.77. The intraday high was at $87.39 and still off support at $84.09, October 11 low.
• Bloomberg is reporting that US crude inventories rose 1.35mn barrels in the latest week according to people familiar with the API data. Gasoline fell 357k though and distillate -2.48mn. The official EIA data is out later today.