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WTI crude oil futures rebounded past $72 per barrel on Thursday, after a 0.4% drop the day before, as traders assessed the potential impact of Donald Trump’s presidency on the market, while the US dollar paused its post-election rally. OPEC+’s recent decision to delay the production hike was driven by weak demand and increased non-OPEC supply. Although OPEC’s oil output rose in October due to Libya’s resumed production, efforts by Iraq to meet its cuts limited overall gains. Iran has also approved a plan to boost output by 250k barrels per day (bpd). Meanwhile, Hurricane Rafael struck Cuba with Category 3 winds but is expected to weaken before reaching the US Gulf Coast, reducing potential oil production disruption to 1.55 million bpd. Nevertheless, the total supply of crude oil in the US strengthened more +12% y/y (as of Nov 1, 2024 EIA) (Figure 1), driven by the all time high of 13.5m bpd recorded the last 4 consecutive weeks, along with nearly above +80% amplified net imports. |
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Figure 1: NYMEX crude oil front month ($/barrel), total crude oil supply (thousand bpd) However, bearish pressure remains due to weak Chinese demand, while the upcoming meeting of the National People’s Congress will be focused on additional stimulus measures aimed at bolstering the slowing economy, primarily to address local government debt. Furthermore, gasoline and distillate stockpiles also declined during the period. Meanwhile, markets continued to assess ongoing geopolitical risks in the Middle East, including the potential for renewed hostilities after Israel’s military chief warned of a ‘very hard’ strike on Iran if another missile attack occurs. |