Crude Oil WTI Futures Market News and Commentary
Oct WTI crude oil (CLV19) this morning is up by +0.53 (+0.91%), Nov Brent crude oil (CBX19) is up by +0.37 (+0.57%), and Oct RBOB gasoline (RBV19) is down -0.0069 (-0.41%). The energy complex is mixed this morning as doubts about the speed of the recovery of Saudi oil production offsets a stronger dollar. Crude prices are higher this morning as Middle East tensions remain high. President Trump today declined to say if he's planning for military action against Iran in retaliation for last Saturday's attacks on Saudi oil facilities, although he did say the U.S. Treasury will impose sanctions on the Central Bank of Iran. Iran's foreign minister on Thursday warned that any U.S. or Saudi strike on his country in response to Saturday's attack on Saudi oil installations would lead to "all-out war." Concerns remain about how soon Saudi Arabia can resume production at its damaged oil facilities. Saudi Arabia's Abqaiq oil processing facility on Wednesday said it had recovered to 41% of capacity or to 2 million bpd and Aramco said crude processing at Abqaiq will return to the pre-attack level of about 4.9 million bpd by the end of the month. An easing of U.S./China trade tensions is positive for economic growth and energy demand. President Trump said today that "China wants to make a deal" and trade negotiators from the U.S. and China resume meetings in Washington D.C. for a second day today. Crude prices on Monday surged to 3-3/4 month highs after Saudi Arabia lost about half of its oil production output (i.e., 5 mln bpd of total 9.8 mln bpd production), representing about 5% of total world output, due to a drone/missile attack and fire at its key Abqaiq oil processing facility on Saturday. Gains in crude were limited today and gasoline prices fell on strength in the dollar along with negative carry-over from Wednesday's EIA data that showed U.S. crude inventories unexpectedly climbed +1.058 million bbl, above expectations of a -2.0 million bbl draw, and after EIA gasoline supplies unexpectedly rose +781,00 bbl, higher than expectations of -750,000 bbl. Wednesday’s weekly EIA data showed that U.S. crude oil inventories as of Sep 13 were -0.8% below the seasonal 5-year average, gasoline inventories were +3.8% above the 5-year average, and distillate inventories were -5.6% below the 5-year average. U.S. crude production in the week ended Sep 13 was unchanged at 12.4 million bpd, just below the record high of 12.5 million bpd in the week of Aug 23.