Oil prices have oscillated but continued higher as of Wednesday afternoon following reports from the Saudi oil minister yesterday that OPEC+ could ‘reduce ‘production in order to support prices and further noting that paper and physical markets had been ‘disconnected.’ Notwithstanding, other OPEC members noted that the increase would not be immediate especially considering many producers lack the capacity and the cuts would have to coincide with Iranian oil coming back to the market. This comes as Chinese imports are expected to post another soft figure for August of 8.3 million barrels, which is below the yearly average of 9.9 million barrels. Lending further support were reports that European oil storage declined slightly by 3.3% and that Indian oil imports in July rose by the most in 3 months with July up by 35.4% in comparison to year ago levels. Contributing to this extension higher are a larger than expected decline in inventories following last weeks decline of 7 million barrels. This week’s report showed stocks fell -3.282 million barrels with SPR stocks having their biggest weekly draw since the releases started at -8.0 million barrels, according to the EIA.  Total combined crude stocks have now fallen to 874.7 million barrels, which is -17% below this time last year. Oil continues to remain bearish trend with oil volatility (ovx) remaining high around 50 with today’s range seen between 85.47 – 94.66.

800-438-4805312-373-5484Series 3 Licensed

Alexander Turro

Senior Market Strategist
Alex began his career with an IB at the Chicago Board of Trade after graduating with a BA/BS from Indiana University. He then went on to work for a proprietary trading software company before joining RJO Futures as a Market Strategist.
Read More