The Nov WTI trading session settled at 69.02(+1.27), had a high of 69.61, a low of 67.70. Cash price is at 68.65 (-0.29), while open interest came in at 307,947. Higher on the day by 1.87% CLX traded above its 7 day (67.61) but below its 20 day (70.72), its 50 day (73.98), and its 200 day (74.99) moving-averages. The COT report as of 9/13 showed commercials with a net short position of -207,021 (less short by 32,348 compared to last week) to non-commercials who are net long 174,881 (less long by -29,903 compared to last week).
Via the Bureau of Safety and Environmental Enforcement a fifth of oil production in the Gulf of Mexico remains shut down, with staff from 37 platforms still absent as of Sunday night. In other weather related news, traders are tracking one of the most powerful cyclones to hit Shanghai in over 7 decades as Typhoon Bebinca is disrupting port operations. More bearish news out of China as August data released over the weekend showed industrial production for the country slowed to 4.5% year-over-year (a five month low and a dip from the 5.1% reported in July) and also the fifth straight month of decline for oil refinery output. When combining the five major crude and fuel contracts, the net long position has dropped to its lowest level since 2011. I think it’s worth noting that the October WTI futures settled above $70 for the first time in September today. Tomorrow we’ll get API and US CPI numbers and this week we have the much anticipated Federal Reserve rate cut, as its size—whether large or small—could impact the U.S. economy and, in turn, influence benchmark crude prices, as lower interest rates could increase demand for oil in my view. Traders will remain focused on supply and demand issues, as well as the economic outlook in both the U.S. and China, as we move into the fall and winter months, from my perspective.
Jim Rinaudo
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Walsh Trading
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