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OIL: Crude Gradually Trending Higher, Upcoming Event/Data Risk

OIL
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Oil prices are moderately higher today driven by a crude inventory drawdown in the US last week. With the geopolitical risk premium unwinding, focus has returned to supply/demand fundamentals. There are also growing expectations that OPEC will push out its planned supply increase into 2025. But the Middle East continues to be monitored closely as little has been resolved. The USD index is slightly higher.

  • WTI is 0.6% higher at $69.01 after a low of around $68.75, while the Brent January contract is up 0.5% to $72.55/bbl after falling to about $72.35.
  • Rystad Energy believes that OPEC won’t begin to gradually increase output in December as planned, as the group is “making huge money” at current levels (BBG).
  • EIA reported crude inventories fell 515k last week after a 5.47mn build. Gasoline fell 2.71mn and distillate 977k. Refinery utilisation was down 0.4pp to 89.1%.
  • Friday’s US October payrolls are an important data point for oil as it refocuses on the demand outlook. Tuesday’s US election and next week’s Standing Committee of National People’s Congress meeting in China will also be focal points.
  • Later US Q3 ECI, September PCE prices, personal income/spending, October job cuts and jobless claims are released. Also euro area October preliminary CPI and German September retail sales print. 
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Oil prices are moderately higher today driven by a crude inventory drawdown in the US last week. With the geopolitical risk premium unwinding, focus has returned to supply/demand fundamentals. There are also growing expectations that OPEC will push out its planned supply increase into 2025. But the Middle East continues to be monitored closely as little has been resolved. The USD index is slightly higher.

  • WTI is 0.6% higher at $69.01 after a low of around $68.75, while the Brent January contract is up 0.5% to $72.55/bbl after falling to about $72.35.
  • Rystad Energy believes that OPEC won’t begin to gradually increase output in December as planned, as the group is “making huge money” at current levels (BBG).
  • EIA reported crude inventories fell 515k last week after a 5.47mn build. Gasoline fell 2.71mn and distillate 977k. Refinery utilisation was down 0.4pp to 89.1%.
  • Friday’s US October payrolls are an important data point for oil as it refocuses on the demand outlook. Tuesday’s US election and next week’s Standing Committee of National People’s Congress meeting in China will also be focal points.
  • Later US Q3 ECI, September PCE prices, personal income/spending, October job cuts and jobless claims are released. Also euro area October preliminary CPI and German September retail sales print.