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OIL: Weak Outlook Limits Crude’s Upside

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After falling sharply on Friday oil prices are moderately higher today as commodity prices rise and the US dollar is little changed. WTI is up 0.4% to $67.27/bbl after a high of around $67.30 and Brent has risen 0.4% to $71.34, close to the intraday high. Crude has struggled to make up losses as supply/demand fundamentals continue to look weak with a market surplus forecast for 2025.

  • With the appointment of fracking chief Wright as the next US energy secretary, an increase in US oil output looks even more likely under the next administration. OPEC may also increase its supply in 2025 as it delayed its own production increase to the end of December 2024.
  • Apparently there is increasing pressure on Ukraine’s Zelensky to find a way to a peace deal with Russia. But Russia attacked Ukraine’s energy infrastructure across the country on the weekend and the US has given Ukraine permission to use its missiles to strike some sites on Russian territory.
  • The market remains concerned over the strength of China’s crude demand. October product exports were weak with diesel shipments down 57.2% y/y and gasoline -12.8% y/y.
  • Later the Fed’s Goolsbee speaks and November NY Fed services and NAHB housing indices print. The ECB’s Lagarde, de Guindos, Lane and Buch also appear and euro area September trade data are out. BoE’s Greene speaks. 

 

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After falling sharply on Friday oil prices are moderately higher today as commodity prices rise and the US dollar is little changed. WTI is up 0.4% to $67.27/bbl after a high of around $67.30 and Brent has risen 0.4% to $71.34, close to the intraday high. Crude has struggled to make up losses as supply/demand fundamentals continue to look weak with a market surplus forecast for 2025.

  • With the appointment of fracking chief Wright as the next US energy secretary, an increase in US oil output looks even more likely under the next administration. OPEC may also increase its supply in 2025 as it delayed its own production increase to the end of December 2024.
  • Apparently there is increasing pressure on Ukraine’s Zelensky to find a way to a peace deal with Russia. But Russia attacked Ukraine’s energy infrastructure across the country on the weekend and the US has given Ukraine permission to use its missiles to strike some sites on Russian territory.
  • The market remains concerned over the strength of China’s crude demand. October product exports were weak with diesel shipments down 57.2% y/y and gasoline -12.8% y/y.
  • Later the Fed’s Goolsbee speaks and November NY Fed services and NAHB housing indices print. The ECB’s Lagarde, de Guindos, Lane and Buch also appear and euro area September trade data are out. BoE’s Greene speaks.