Oct WTI crude oil (CLV24) Friday closed down -0.32 (-0.46%), and Oct RBOB gasoline (RBV24) closed up +0.32 (+0.17%).
Crude oil and gasoline prices settled mixed on Friday. Crude fell back from a 1-week high and posted moderate losses after oil producers began bringing crude output back online in the Gulf of Mexico after tropical storm Francine passed. Over the past two days, the storm had forced the shut-in of about 670,000 bpd of crude production in the Gulf of Mexico, or about 33% of total Gulf output.
Crude prices Friday initially moved higher after the dollar index fell to a 1-week low. Crude also found support after the S&P 500 rallied to a 2-week high, which showed confidence in the economic outlook that is supportive of energy demand.
Friday's global news was bullish for energy demand and crude prices. The University of Michigan's US Sep consumer sentiment index rose +1.1 to a 4-month high of 69.0, stronger than expectations of 68.5. Also, Japan's July industrial production was revised upward by +0.3 to 3.1% m/m, compared to the previously reported +2.8% m/m.
A decline in crude oil held worldwide on tankers is bullish for prices. Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least seven days fell by -2.14% w/w to 60.25 million bbl in the week ended September 6.
Crude prices found support last Thursday after OPEC+ agreed to pause its scheduled crude production hike of 180,000 bpd in October and November due to recent weakness in crude prices and signs of fragile global energy demand.
Crude oil prices were undercut last Tuesday when Libyan central bank governor Sadiq Al-Kibir said there are "strong" indications that political factions are nearing an agreement to overcome political differences and resume the country's crude oil production. Last week, Libya's eastern government declared force majeure on all oil fields, terminals, and crude export facilities as it called for a halt to all crude production and exports due to political conflict over who controls the country's central bank and oil revenues. The halt to Libya's crude exports threatened to remove more than 1 million bpd of crude from the global market.
An increase in Russian crude exports is negative for crude. Weekly vessel-tracking data from Bloomberg showed Russian crude exports rose by +40,000 bpd to 3.14 million bpd in the week to September 8. Meanwhile, a decline in Russian crude production is positive for oil prices after Russia's Energy Ministry reported Tuesday that Russia's Aug crude production was 9.059 million bpd, down -30,000 bpd from July but +81,000 bpd above the output target it agreed to with OPEC+.
Wednesday's EIA report showed that (1) US crude oil inventories as of September 6 were -4.3% below the seasonal 5-year average, (2) gasoline inventories were -0.6% below the seasonal 5-year average, and (3) distillate inventories were -8.6% below the 5-year seasonal average. US crude oil production in the week ending September 6 was unchanged w/w at 13.3 million bpd, just below the record high of 13.4 million bpd from the week of August 16.
Baker Hughes reported Friday that active US oil rigs in the week ending September 13 rose by +5 rigs to 488 rigs, modestly above the 2-1/2 year low of 477 rigs posted in the week ending July 19. The number of US oil rigs has fallen over the past year from the 4-year high of 627 rigs posted in December 2022.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
