The Oct WTI trading session settled at 68.97 (+1.66), had a high of 69.81, a low of 67.24. Cash price is at 67.29 (+1.50), while open interest came in at 219,822. Higher on the day by 2.47% CLV traded above its 7 day (68.39) but below its 20 day (72.31), its 50 day (76.2), and its 200 day (77.47) moving-averages. The COT report as of 9/3 showed commercials with a net short position of -239,369 compared to non-commercials who are net long 204,784. This is the first back-to-back day of gains we’ve seen in September. Oil continued its rally from the previous session today (this is the first session to pass through the 7 day moving-average since 8/30), as analysts from UBS estimated Hurricane Francine could have disrupted as much as 1.5 million barrels, which would reduce September production in the Gulf of Mexico by around roughly 50,000bpd. Downgraded to a Tropical Depression this afternoon the storm is expected to dissipate by this Sunday. Per Reuters, Saudi Arabia is set to export 46 million barrels of crude oil to China next month, an increase from the previously estimated 43 million barrels. This comes following last week when we got news OPEC+ is prolonging their planned output cuts to December. Yesterday the EIA reported that domestic crude oil inventories rose by 833,000 barrels for the week ending September 6, reversing the previous week’s decrease of 6.873 million barrels, the market forecast was expecting ~1 million barrels. Next week, I believe traders will closely watch the 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 opinion, 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.
Jim Rinaudo
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Walsh Trading
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