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The December WTI (CLZ24) trading session settled at 70.56 (+1.34) [+1.94%], had a high of 71.03, a low of 69.00. Cash price is at 69.16 (-1.50), while open interest for CLZ24 is at 338,184. CLZ settled above its 5 day (70.25), below its 20 day (71.29), below its 50 day (71.55), below its 100 day (73.94) and below its 200 day (74.95) moving-averages. The COT report (Futures and Options Summary) as of 10/15 showed commercials with a net short position of -246,812 (a decrease in short positions by +6,041 compared to last week) to non-commercials who are net long 213,220 (a decrease in long positions by -12,994 compared to last week).
Rebounding today after a 8.4% loss in WTI front-month price for crude last week, the largest weekly loss since October of last year, crude held steady and settled over nearly 2% higher off fresh war-premium headlines and new Chinese stimulus.
Over the weekend classified documents leaked from U.S. officials detailing information pertaining to Israel’s retaliatory strike on Iran, Israel continuing its bombing campaign inside Beirut and Prime Minister Netanyahu’s house was attacked by a Hezbollah drone strike. According to U.S. officials that have been briefed, Israel is poised to strike Iran before the U.S. Presidential election, which is now only two weeks away.
Bull’s were happy to see China lowering their prime lending rates, providing new monetary stimulus and sending the Shanghai CSI 300 Index up 0.25%. On Friday China disclosed that their GDP came in at 4.6%, slightly above the 4.5% forecast but below the 4.7% pace in the second quarter. As well on Friday the People’s Bank of China said they would add more than $100 billion into China’s stock market. At the Singapore International Energy Week this morning Saudi Aramco’’s CEO Amin Nasser was quoted as saying he remains “fairly bullish” on China’s oil imports.
Tomorrow we’ll get fresh API numbers. I think we’ll see the trend of larger draws for the API and EIA again this week.
The $67 floor has seemed to hold and I now think prices will try to test $72 to the upside, I expect us to stay in this range for the time being. In my short-term view, with this Israeli strike looming over the markets, I would expect the market to move ~5% higher off the back of that attack alone. After which I would expect we then sell back to the range we’re in now, with the theme of a stronger dollar, slowing economies and a lack of global demand front running price sentiment.
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Jim Rinaudo
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