Crude Oil WTI Futures Market News and Commentary
Nov WTI crude oil (CLX19) on Wednesday closed up by +0.55 (+1.04%), Dec Brent crude oil (CBZ19) closed up +0.68 (+1.16%), and Nov RBOB gasoline (RBX19) closed up +0.0104 (+0.64%). The energy complex moved higher Wednesday after the dollar index today tumbled to a 1-month low. The weak dollar benefits most commodities priced in dollars. Brexit optimism sparked a rally in the Euro Stoxx 50 to a 1-1/2 year high Wednesday, which was supportive for economic growth and energy demand prospects. UK Brexit Secretary Barclay told a parliamentary committee Wednesday that UK Prime Minister Johnson will seek an extension on Saturday if a deal hasn't been reached by then. Crude oil prices on Wednesday were undercut after the International Energy Agency (IEA) said that OPEC faces a "serious challenge" if it wants to defend oil prices next year since fuel demand growth could slow further and since non-OPEC production continues to grow. Another negative for crude prices was concern that an economic slowdown in the U.S., the world's biggest consumer of crude, will undercut energy demand. Wednesday's U.S. Sep retail sales report unexpectedly fell -0.3% and -0.1% ex-autos, weaker than expectations of +0.3% and +0.2% ex-autos and the first decline in 7 months. Crude oil prices were also undercut by concern a trade agreement between the U.S. and China may be in jeopardy on increased tensions over Hong Kong after China's foreign ministry on Wednesday threatened unspecified "strong countermeasures" if the U.S. Congress passes a bill offering support to pro-democracy protesters in Hong Kong. The energy complex fell back from its best levels Wednesday afternoon when the API reported that U.S. crude stockpiles jumped +10.5 million bbl last week. Another bearish factor for crude is the consensus for Thursday's weekly EIA crude inventories to climb by +3.0 million bbl. Last Wednesday’s weekly EIA data showed that U.S. crude oil inventories as of Oct 4 were +1.3% above the seasonal 5-year average, gasoline inventories were +2.3% above the 5-year average, and distillate inventories were -9.5% below the 5-year average. U.S. crude production in the week ended Oct 4 rose +1.6% w/w to a new record high of 12.6 million bpd.