Oil Price Fundamental Daily Forecast – Prices Expected to Stabilize on Low Volume Trading

U.S. West Texas Intermediate crude oil and international-benchmark Brent crude oil are trading higher early Monday with both futures contracts trading inside Friday’s wide range. This indicates investor indecision and impending volatility.

At 0610 GMT, December WTI Crude Oil is trading $49.83, up $0.18 or +0.36% and January Brent Crude Oil is at $55.54, up $0.18 or +0.33%.

Supporting prices early Monday are expectations that Saudi Arabia would continue to curtail its production in order to underpin prices and another slight drop in the number of U.S. rigs drilling for new oil.

Traders also appear to be taking a wait and see attitude after oil ports, producers and refiners in Louisiana, Mississippi and Alabama, shut down operations ahead of Hurricane Nate which made landfall over the week-end.

It looks as if there was little damage to refinery infrastructure and most facilities were planning to reopen today.

Forecast

Prices are expected to stabilize today after falling sharply on Friday on concerns of overproduction. Expecting to underpin the market is a Saudi Arabian commitment to support the market by restraining output. The oil rig count also fell by two to 748 in the week to October 6.

In other news, according to the U.S. Commodity Futures Trading Commission, hedge funds and money managers raised their bullish bets on U.S. crude futures for the third week in a row. Futures and options positions in WTI on the NYMEX and ICE markets increased by 3,211 contracts to 288,766 in the week to October 3, its highest since mid-August.

Trading activity could be low on Monday due to the Columbus Day federal holiday in the United States although the futures markets are open.