Oil Bulls Celebrate October, Yet Market Dynamics Change
Oil prices in the U.S. dipped slightly for the week, ending a streak of nine weeks in a row of price increases.
During October, West Texas Intermediate futures soared 11% and Brent Crude climbed 7.5%, showing how the ongoing gas shortage has increased demand for oil products.
It appears that OPEC will not raise production in the near term, which is giving strength to the market. More Iranian supply may come online, however.
Reports that U.S. crude inventories rose by 4.3 million barrels last week have pressured prices since Wednesday. By the end of November, Iran plans to begin talks to revive the international nuclear agreement, a step toward boosting oil exports.
Crude oil prices increased in 2021 as economies recovered from the COVID-19 pandemic, but are expected to fall this week, with Brent trading at a two-month low.
Despite record oil prices, U.S. energy firms added more oil and natural gas rigs in October for the 15th consecutive month, an energy services firm said in its closely watched report on Friday.
In its most recent trading session, WTI price provided clear positive trades and tested previously broken minor support at $83 a barrel, which now represents resistance as it continues to hold below it, and provides bearish rebound signals now, accompanied by a declining stochastic reading.
In conclusion, we believe that negative trades are likely in the coming sessions, and the next main target is located at $79.8 a barrel, noting that a breach above $83.50 a barrel will stop the expected decline and lead the price to resume its main bullish trend.
Following a sharp cut to crews and output in the Permian shale basin last year, Exxon and Chevron are looking at adding drilling rigs. As of this quarter, Chevron plans to increase drilling rigs and completion crews by two.
Algeria said Thursday that OPEC+ should not increase crude output by more than 400,000 barrels a day due to risks and uncertainties in the market. As part of the alliance’s unwinding of last year’s record output cuts, the group meets on November 4.
Russian President Vladimir Putin said on Friday that Russia could begin pumping gas into European storage facilities.