Oil End of Day Summary: Crude Up on Interest Rate Optimism

Crude Oil has reversed earlier losses to surge into positive territory, following comments from Fed Chair Jerome Powell on a slightly more positive economic picture and hope that there will be no further interest rate hikes. Adding some downside is the easing of sanctions on Venezuelan barrels.

• WTI NOV 23 up 1.2% at 89.35$/bbl
• WTI DEC 23-JAN 24 up 0.11$/bbl at 1.29$/bbl
• The Federal Reserve will "carefully" consider whether to raise interest rates further and how long to keep them high, given "very favorable" decline in inflation over the summer, indications that the labor market is cooling and the likelihood of more "meaningful tightening" still filtering through from past increases, Fed Chair Jerome Powell said Thursday.
• Initial reaction is that Chair Powell's prepared text leans dovish vs expectations, leading to the market to think that there is little urgency to hike rates.
• The Biden Administration Announced Wednesday the removal of a broad array of sanctions against Venezuela’s oil and gas sector. The US is issuing licenses to broadly ease sanctions on Venezuela’s oil and gas sector which could boost oil output by 25% to about 200kbpd.
• OPEC+ does not expect any major impact on its policy from Venezuelan sanctions easing according to Reuters OPEC+ sources.
• Russian President Putin has wrapped up his two-day visit to China Thursday, praising “unprecedented” energy ties between the nations but little in the way of major new developments.
• The Russian government has approved a draft protocol to extend a deal, that is set to expire in 2024, by another ten years to supply crude from Russia to oil refineries in western China according to Interfax.
• China has not ruled out a small round of refilling for its strategic petroleum reserves because of the escalating geopolitical risks in the Middle East, Energy Aspects wrote in a note.
• The unwinding of US sanctions on Venezuelan oil could impact Chinese refiners that have gotten used to it as a source of cheap crude in recent years.
• National Iranian Oil Company has set the official selling price for light crude to Asia at +$3.85/bbl, up from +$3.50/bbl for October.
• Angola is likely to maintain its current crude oil production of 1.1m b/d through to 2024, a Reuters said citing an Angolan government official.
• Azerbaijan’s total crude and condensate production was 607k b/d in September, down from 620k b/d in August, according to the Energy Ministry.