Prices Higher, But Supply Outlook Improving

Oil prices rose over a percent on Friday to be little changed on the week. There was a sharp drop during the NY session which may have been due to Marathon shutting a refinery but prices bounced back to reach new intraday highs. Crude didn’t react significantly to Fed Chairman Powell’s comments. The USD finished 0.2% higher.

• WTI rose 1.3% to close above $80/bbl on Friday to be down 0.8% on the week. It reached a low of $78.14, still above resistance, followed by a high of $80.45. It has started Monday slightly higher at $80.20. Support is at $77.48, the 50-day EMA, and resistance is $81.75, August 21 high.
• Brent rose 1.7% to $84.79 to be flat on the week. It approached $85 on Friday but didn’t break above reaching a high of $84.97. The low was $82.67 holding above support at $81.75, the 50-day EMA. Resistance is at $85.86, August 21 high.
• A tightening market due to OPEC output cuts is likely to provide support to prices through H2 2023 but there could be increased supply from an informal deal between the US and Iran on crude shipments. Negotiations are also ongoing to ease oil sanctions on Venezuela which was producing up to 2mbd.
• Also talks continue to restart Iraqi Kurdish oil exports through the Turkish port of Ceyhan, which were halted months ago.
• On the other hand, the US Baker Hughes rig count fell to a new eighteen-month low in the latest week.