The Nov WTI (CLX24) trading session settled at 73.71 (+3.61) [+5.15%], had a high of 74.09, a low of 70.52. Cash price is at 70.14 (+0.33), while open interest for CLX24 is at 308,702. CLX settled above its 5 day (70.06), its 20 day (69.16), its 50 day (71.82), ((CLX broke through its 50 day MA to the upside today)), but below its 200 day (74.87) moving-averages. The COT report (Futures and Options Summary) as of 9/27 showed commercials with a net short position of -209,236 (a increase in short positions by 10,199 compared to last week) to non-commercials who are net long 191,109 (a increase in long positions by 15,981 compared to last week).
Crude oil prices hit a 1-month high this morning after President Biden said he had discussions with Israel over striking Iranian oil facilities in response to Iran’s rocket barrage on Tuesday. In my opinion we should also account for some of the sessions’ huge gain to short covering and rolling into the December contract. I think we’ll see it being reflected in tomorrow’s COT report with commercials taking off some of their short positioning and speculators hopping in on the long side based on the war-premium. For technical Bulls CLX broke through its 50 day MA and settled above its 72.50 resistance line.
A Reuters survey from this morning showed OPEC had its lowest output in oil production this year in the month of September, at 26.14 million barrels per day, down 400,000bpd from August. Production was down last month due to the halt in Libya, but as of this morning, the country has resumed its oil production of ~1.2 million barrels per day. Nothing much headline worthy seemed to come from yesterday’s OPEC+ meeting. Saudi Arabia did warn Iraq and other countries to not violate their output quota, warning the conglomerate that prices could fall to $50 a barrel if violations continue to occur. The organization still plans on sticking with the December timetable for an increase of 180,000bpd output. In China, the CSI 300 Index, has jumped over 25% over the last week since China released their economic stimulus package, and there were more rumors today the country could soon announce further stimulus plans.
The EIA yesterday showed commercial crude inventories increasing by 3.9mb from the previous week, historically we are still around 4% below the 5 year average. Tuesday’s API data showed a smaller than expected decline in U.S. stocks, with inventories decreasing ~1.6mb, compared to the drawdown of 4.3mb from the previous weekly report.
Today’s jobs showed weekly jobless claims rising slightly over the previous week. Tomorrow’s Unemployment Claims for September should have traders’ attention to see what the Fed may do next. As the dockworks strike hit day three the 3 major U.S. indexes closed lower and the CBOE volatility index hit a three-week high.
Jim Rinaudo
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Walsh Trading
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