Crude Holds Steady As Factors Balance Out

Oil prices held steady on Monday after rising around 2% last week. The market fundamentals, better risk tone and lower dollar provided some support but downward pressure came from technical indicators suggesting that it is overbought. The USD index fell 0.5%.

• WTI fell 0.2% to close at $87.31/bbl. It broke resistance at $88.08 to reach a high of $88.15 and open $90 but the break above $88 was only brief. It has started the day steady at about $87.30. Brent was flat closing at $90.62. Earlier it cleared resistance at $91.15 to make a high of $91.45 and open $92.91. It traded above $90 throughout the day.
• The US is slowly refilling the Strategic Petroleum Reserve and the DoE said that last week 300k barrels of sour crude were added and it now has a total 350.6mn. So far about 3.9mn barrels of 6.3mn purchased were received in August/September.
• Diesel futures continued to rally in Europe rising above $1000/t for the first time since January, as Russia is due to cut western seaborne shipments by around 25% this month due to refinery maintenance and government efforts to keep local prices down, according to Bloomberg. Heading into winter the market is worried re supplies given the fuel is also used for heating.
• The Australian Institute of Petroleum reported national petrol prices fell to 201.7c/L last week from 203.3c/L.