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Oil Closing Out Week For Strong Gains On OPEC+ Cut Extensions

COMMODITIES
  • Front month crude futures have regained ground during the trading day, despite an intraday recovery in the USD index, seemingly still supported by OPEC+ cut extensions.
  • Looking on the week, Brent is up around $4/b compared to Sep. 1, as OPEC+ cuts and larger than expected inventory draws in the US point towards a tightening market. WTI has outperformed brent, aided by the surprisingly large draw in US crude inventories.
  • OPEC+ crude oil output in August rose by 120kbpd to 40.52mbpd as increases from Iran, Iraq and Nigeria more than offset further reductions by Saudi Arabia and Russia, according to the latest Platts survey. However, OPEC+ may be forced to once again extend or deepen cuts in 2024 as supply balances remain elevated, Citi said in a note.
  • The US oil rig count saw its first weekly increase since June this week, albeit by 1 to 513 according to Baker Hughes.
  • WTI is +1.0% at $87.69, coming close to resistance at $88.08 (Sep 6 high) after which lies the round $90.00.
  • Brent is +1.0% at $90.81, coming close to resistance at $91.15 (Sep 5 high) after which lies $92.91 (Nov 17, 2022 low).
  • Gold is +0.03% at $1920.20, off a high of $1929.71 as the USD clawed back to near unchanged on the day. That high came close to resistance at the 50-day EMA (1931.4) after which lies a key resistance notably higher at $1953.0 (Sep 4 high) to highlight the sizeable decline for the yellow metal this week with the DXY some +0.8% higher over the same period.
  • Weekly moves: WTI +4.9%, Brent +2.6%, Gold is -1.0%, US nat gas -6%, EU TTF nat gas -3.1%

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