Oct WTI crude oil (CLV24) Monday closed up +1.44 (+2.10%), and Oct RBOB gasoline (RBV24) closed up +3.80 (+1.97%).
Crude oil and gasoline prices Monday rallied sharply to 1-week highs. Monday's slide in the dollar index to a 1-week low was bullish for most commodity prices. Also, the disruption of crude exports from Libya has tightened global supplies and supported oil prices. A negative for crude is concern about Chinese fuel demand after Monday's weaker-than-expected Chinese economic reports.
Reduced Libyan oil production and exports are supporting oil prices as UN-led talks failed to break an impasse in Libya over control of the country's central bank, which has led to reduced crude exports. Libya's crude exports fell to 314,000 bpd last week from 468,00 bpd at the beginning of this month. Earlier this month, Libya's eastern government declared force majeure on all oil fields, terminals, and crude export facilities as it called for a halt to all crude production and exports due to political conflict over who controls the country's central bank and oil revenues.
Chinese economic news Monday was weaker than expected, which sparked concerns about fuel demand in China, the world's second-largest crude-consuming country. China Aug industrial production rose +4.5% y/y, weaker than expectations of +4.7% y/y. Also, Aug retail sales rose +2.1% y/y, weaker than expectations of +2.5% y/y. In addition, Aug new home prices fell -0.73% m/m, the largest decline in 9-3/4 years.
A decline in crude oil held worldwide on tankers is bullish for prices. Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least seven days fell by -1.5% w/w to 65.53 million bbl in the week ended September 13.
Crude prices found support after OPEC+ on September 5 agreed to pause its scheduled crude production hike of 180,000 bpd in October and November due to recent weakness in crude prices and signs of fragile global energy demand.
An increase in Russian crude exports is negative for crude. Weekly vessel-tracking data from Bloomberg showed Russian crude exports rose by +40,000 bpd to 3.14 million bpd in the week to September 8. Meanwhile, a decline in Russian crude production is positive for oil prices after Russia's Energy Ministry reported Tuesday that Russia's Aug crude production was 9.059 million bpd, down -30,000 bpd from July but +81,000 bpd above the output target it agreed to with OPEC+.
Last Wednesday's EIA report showed that (1) US crude oil inventories as of September 6 were -4.3% below the seasonal 5-year average, (2) gasoline inventories were -0.6% below the seasonal 5-year average, and (3) distillate inventories were -8.6% below the 5-year seasonal average. US crude oil production in the week ending September 6 was unchanged w/w at 13.3 million bpd, just below the record high of 13.4 million bpd from the week of August 16.
Baker Hughes reported last Friday that active US oil rigs in the week ending September 13 rose by +5 rigs to 488 rigs, modestly above the 2-1/2 year low of 477 rigs posted in the week ending July 19. The number of US oil rigs has fallen over the past year from the 4-year high of 627 rigs posted in December 2022.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
