WTI started the day lower and at the time of this post it is up almost $2/bbl from the low.
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The Energy Report: United OPEC Stands < With my thoughts in blue.
By Phil Flynn
Oct 29, 2021 01:35PM ET
Oil prices are overcoming the hearings on climate change and will have to deal with the reality that the COP 26 UN climate summit is unlikely yield a major deal. China and India are still refusing to say that they will stop using coal anytime soon. In the meantime, OPEC controls the global oil space getting more powerful every day. The bottom line is that if OPEC thinks that demand is down, then oil production will not go up more than they had already planned. The oil market had false hope that Vladimir Putin’s comments that the EC plus might pump a little more oil last week may not happen because of OPEC’s outlook on oil demand is looking murky. < Last week Mr. Putin said some of the OPEC+ countries already reach peak production and could not produce anymore oil. I think OPEC's remaining spare capacity may be overstated by up to 2 million barrels per day, meaning this world will have NO SPARE CAPACITIY WITHIN SIX MONTHS.
Reuters reported that the OPEC+ committee trimmed its forecasts for global oil demand growth this year to 5.7 million barrels per day from 5.8 million, two sources said, amid a continuing strong recovery in consumption from 2020’s collapse. The Joint Technical Committee, which met on Thursday, left its demand forecast for next year steady at 4.2 million bpd, one source said.
Oil traders will see this as bullish. If OPEC sticks to its plan, then we will see global oil supplies trend lower as refiners start to come out of maintenance. Inventories will fall and that should give the oil market a floor. < Oil demand is seasonal. Each year is spikes up by ~2 million bpd, which will be when OPEC+ is totally out of spare capacity. "Rationing by price" will take WTI over $100/bbl.
After its big selloff yesterday, crude oil came back to close higher. Technically oil needs another strong close today to reestablish upward momentum.
Natural gas futures are pulling back here a little bit today. We expect that natural gas is going to be a pretty good buy on this dip. We recommend maybe putting on some butterfly spread options because the strike calls are very expensive but the sell-off might be an opportunity to get hedged. At some point natural gas futures will get back above $6 and may get towards $7 this winter especially if we get cold weather in November, which is the forecast today.
Oil Prices bounce back Friday afternoon - Oct 29
Oil Prices bounce back Friday afternoon - Oct 29
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Prices bounce back Friday afternoon - Oct 29
NEW YORK (Reuters) -U.S. crude prices edged higher on Friday, turning positive after an early decline, supported by expectations that the Organization of the Petroleum Exporting Countries, Russia and their allies, known as OPEC+, would maintain production cuts.
Brent crude rose 4 cents to $84.38 a barrel at 12:06 p.m. EDT (1606 GMT) and U.S. West Texas Intermediate crude rose 11 cents, or 0.1%, to $82.92 . Both benchmarks touched multi-year highs on Monday. WTI is at $83.45 at the time of this post.
"While more Iranian supply may come online, it looks like OPEC+ is unlikely to raise production which is giving strength to the market today," said John Kilduff, partner at Again Capital LLC in New York.
Prices have been pressured since Wednesday by a report that U.S. crude stocks rose by 4.3 million barrels in the latest week. Iran has said talks on reviving the international deal on its nuclear programme will restart by the end of November, bringing it a step closer to boosting oil exports.
"The sharp rise in U.S. crude oil stocks and the expectation of nuclear talks being resumed with Iran have temporarily eased concerns about supply to some extent," said Commerzbank (DE:CBKG)'s Carsten Fritsch.
On Thursday, Algeria said a crude output increase by OPEC+ in December should not exceed 400,000 barrels per day (bpd) because of market uncertainties and risks. The alliance, which is gradually unwinding last year's record output cuts, meets on Nov. 4. < Of course the small OPEC+ countries that are already at peak production want OPEC+ to keep the oil market tight and oil prices high.
British and European natural gas prices continued to fall on Friday after Russian President Vladimir Putin said Russia could start pumping gas into European storage.
Brent crude rose 4 cents to $84.38 a barrel at 12:06 p.m. EDT (1606 GMT) and U.S. West Texas Intermediate crude rose 11 cents, or 0.1%, to $82.92 . Both benchmarks touched multi-year highs on Monday. WTI is at $83.45 at the time of this post.
"While more Iranian supply may come online, it looks like OPEC+ is unlikely to raise production which is giving strength to the market today," said John Kilduff, partner at Again Capital LLC in New York.
Prices have been pressured since Wednesday by a report that U.S. crude stocks rose by 4.3 million barrels in the latest week. Iran has said talks on reviving the international deal on its nuclear programme will restart by the end of November, bringing it a step closer to boosting oil exports.
"The sharp rise in U.S. crude oil stocks and the expectation of nuclear talks being resumed with Iran have temporarily eased concerns about supply to some extent," said Commerzbank (DE:CBKG)'s Carsten Fritsch.
On Thursday, Algeria said a crude output increase by OPEC+ in December should not exceed 400,000 barrels per day (bpd) because of market uncertainties and risks. The alliance, which is gradually unwinding last year's record output cuts, meets on Nov. 4. < Of course the small OPEC+ countries that are already at peak production want OPEC+ to keep the oil market tight and oil prices high.
British and European natural gas prices continued to fall on Friday after Russian President Vladimir Putin said Russia could start pumping gas into European storage.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group