November WTI Crude Oil 9/23/24

9/23//24

The Nov WTI trading session settled at 70.37(-0.63) [-0.89%], had a high of 71.81, a low of 69.49. Cash price is at 71.02 (-0.89), while open interest came in at 355,622. CLX settled below its 7 day (70.45) ((broke below the 7 and 20 day)), its 20 day (70.94), its 50 day (74.49), and its 200 day (77.31) moving-averages. The COT report (Futures and Options Summary) as of 9/20 showed commercials with a net short position of -199,037 (a decrease in short positions by 7,981 compared to last week) to non-commercials who are net long 175,128 (a increase in long positions by 247 compared to last week).

WTI and Brent crude oil increased by over 4% last week, fueled by the U.S. Federal Reserve's decision to reduce interest rates by 50 basis points. Some bullish news, in my view, out of China as Chinese crude oil imports surged to 11.56 million bpd in August, marking the highest level since August 2023 and a recovery from July's low of 9.97 million bpd, according to official data cited by Reuters’s Clyde Russell. This increase represents China's highest monthly crude oil volume in a year, driven by rising purchases amid declining international oil prices. Notably, imports from Russia rose by 25.6% month-on-month in August. More turmoil on the Israel-Lebanon border over the weekend as the two sides traded rocket strikes and this morning the Pentagon announced the U.S. would be sending in additional troops to the region. The situation is fluid but in my opinion, but it seems it is trending away from “stability” and more towards uncertainty, the war-premium-black-swan seems to be gathering more wind. For weather news, The National Hurricane Center (NHC) has forecasted a new tropical storm with hurricane potential in the Gulf of Mexico, The NHC expects the storm to reach severity beginning this Thursday through the weekend, whether this turns into Hurricane Helene or stays as a tropical storm is yet to be determined. Concerns over China’s crude demand and the economic state in the U.S. and Europe continue to fuel this bearish positioning in the market as we enter the fall and winter months, in my view. As of today I still see support around $68 and resistance around $72, the API and EIA numbers combined with the Middle East situation and this storm in the Gulf of Mexico could see us breakthrough that $72 hurdle this week.

Jim Rinaudo

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Walsh Trading

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