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OIL: Crude Range Trading But Watching Middle East & China Developments Closely

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Oil prices traded in a narrow range on Friday but could be more volatile this week as Israel and Hezbollah in Lebanon moved closer to war. They were stronger last week boosted by the outsized Fed cut but also supply outages and escalation of tensions in the Middle East, but China’s demand outlook remains a focal point. The USD rose 0.1%.

  • WTI rose 0.1% to $71.25/bbl to be up over 5% last week but still down 1.9% in September. It fell to $70.37 and then rallied to $71.45, still below initial resistance at $71.53. It is currently slightly lower at around $71.22. The recovery still seems corrective and moving average studies remain in bear mode.
  • Brent fell 0.2% to $74.72/bbl to be up 4.3% last week but 2.9% lower this month. Initial support is at $71.46 with the bear trigger at $68.68. Initial resistance is $74.14, 20-day EMA.
  • Israel targeted rocket launchers in southern Lebanon over the weekend after striking Hezbollah leadership in Beirut and exploding devices. Hezbollah fired around 150 rockets and missiles into Israel. The UN has counselled both sides to step back from the brink. Iran supports Hezbollah and there could be risks to oil markets if it were to become more involved in the conflict.
  • The autumn refining maintenance season begins soon but IIR Energy has said that it will be the lightest for 3 years. It is expected to remove 529k barrels per day of capacity, according to Bloomberg.
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Oil prices traded in a narrow range on Friday but could be more volatile this week as Israel and Hezbollah in Lebanon moved closer to war. They were stronger last week boosted by the outsized Fed cut but also supply outages and escalation of tensions in the Middle East, but China’s demand outlook remains a focal point. The USD rose 0.1%.

  • WTI rose 0.1% to $71.25/bbl to be up over 5% last week but still down 1.9% in September. It fell to $70.37 and then rallied to $71.45, still below initial resistance at $71.53. It is currently slightly lower at around $71.22. The recovery still seems corrective and moving average studies remain in bear mode.
  • Brent fell 0.2% to $74.72/bbl to be up 4.3% last week but 2.9% lower this month. Initial support is at $71.46 with the bear trigger at $68.68. Initial resistance is $74.14, 20-day EMA.
  • Israel targeted rocket launchers in southern Lebanon over the weekend after striking Hezbollah leadership in Beirut and exploding devices. Hezbollah fired around 150 rockets and missiles into Israel. The UN has counselled both sides to step back from the brink. Iran supports Hezbollah and there could be risks to oil markets if it were to become more involved in the conflict.
  • The autumn refining maintenance season begins soon but IIR Energy has said that it will be the lightest for 3 years. It is expected to remove 529k barrels per day of capacity, according to Bloomberg.