Record U.S. Crude Oil Exports Push Oil Prices Up | OilPrice.com
Posted on October 28, 2022
December WTI crude oil futures finished higher on Thursday, putting the market in position to close higher for the week. The bullish price action was fueled by a number of factors, including optimism over record US crude exports, signs that recession fears are fading and a weaker US dollar. Concerns over Chinese demand helped limit gains.
Longer-term traders noted that the start of OPEC+ production cuts and the European Union’s embargo on Russian crude oil also supported prices all week.
Record rise in US crude exports – EIA
U.S. crude oil inventories rose in the most recent week even as export volumes hit an all-time high, the Energy Information Administration reported Wednesday.
Crude inventories rose 2.6 million barrels in the week to October 21 to 439.9 million barrels, nearly triple analysts’ forecasts in a Reuters poll for a 1 million-barrel rise.
The big surprise that lifted prices, however, was news that crude exports hit a weekly record of 5.1 million barrels per day, reducing net crude imports to just over 1 million. bpd, also a record.
Crude oil is supported after the GDP report showed signs of easing inflation
Crude Oil was also supported on Thursday after the latest US GDP report showed signs that inflationary pressures may be easing.
The US gross domestic product report showed economic growth of 2.6% in the third quarter. Economists…
December WTI crude oil futures finished higher on Thursday, putting the market in position to close higher for the week. The bullish price action was fueled by a number of factors, including optimism over record US crude exports, signs that recession fears are fading and a weaker US dollar. Concerns over Chinese demand helped limit gains.
Longer-term traders noted that the start of OPEC+ production cuts and the European Union’s embargo on Russian crude oil also supported prices all week.
Record rise in US crude exports – EIA
U.S. crude oil inventories rose in the most recent week even as export volumes hit an all-time high, the Energy Information Administration reported Wednesday.
Crude inventories rose 2.6 million barrels in the week to October 21 to 439.9 million barrels, nearly triple analysts’ forecasts in a Reuters poll for a 1 million-barrel rise.
The big surprise that lifted prices, however, was news that crude exports hit a weekly record of 5.1 million barrels per day, reducing net crude imports to just over 1 million. bpd, also a record.
Crude oil is supported after the GDP report showed signs of easing inflation
Crude Oil was also supported on Thursday after the latest US GDP report showed signs that inflationary pressures may be easing.
The US gross domestic product report showed economic growth of 2.6% in the third quarter. Economists polled by Dow Jones were expecting 2.3%.
In addition to posting stronger than expected growth, the GDP report provided at least some good news on inflation.
The silver lining in the report was not growth, but prices. The GDP price index slowed significantly quarter over quarter and came in below expectations. This is another sign indicating the likelihood that the worst of inflation is behind us.
Hope that the Fed could slow aggressive rate hikes from December would lead to a weaker dollar
Throughout the week, weak reports from U.S. real estate and purchasing managers led to speculation that the Federal Reserve could announce it would slow the pace of interest rate hikes. from December.
The news caused the US dollar to fall sharply against a basket of major currencies, driving up foreign demand for dollar-denominated crude oil.
Weekly technical analysis
December WTI Weekly Crude Oil
Analysis of trend indicators
The main trend is down. However, momentum shifted to the upside following the confirmation of the closing price reversal low for the week ending September 30th.
A move to $95.55 will change the main uptrend. A trade at $75.70 will signal the resumption of the downtrend.
The small trend is up. A new minor high was formed at $92.34. A trade through this level will reaffirm the minor uptrend. A trade through the minor low at $81.30 will alter the minor downtrend.
Retracement level analysis
The short-term range is $110.78-$75.70. With an upward move, its retracement zone from $93.24 to $97.38 becomes the main upside target and potential resistance zone.
The new minor range is $92.34 to $81.30. Its pivot at $86.82 is the closest support.
The main range is $60.20 to $110.78. The market is currently trading on the bullish side of its retracement zone at $85.49 to $79.52, making it a support.
The contract range is $34.75 to $110.78. Its retracement zone at $72.77 to $63.79 is the next major downside target and value zone.
Weekly Technical Forecast
The direction of the December WTI Crude Oil market for the week ending Nov. 4 will likely be determined by how traders react to the 50% level at $85.49.
Bullish scenario
A sustained move above $85.49 will signal the presence of buyers. This could lead to a quick test of the resistance band at $92.34-$93.24, followed by the main high at $95.55 and the Fibonacci level at $97.38. The latter is a potential trigger point for an upward acceleration.
Downside scenario
A sustained move below $85.49 will indicate that the selling pressure is building. This could trigger an acceleration towards the Fibonacci level at $79.52. This is the last support before the main low at $75.70. The removal of this level will signal a resumption of the downtrend.
Short-term outlook
Price action early in the week focused on weakness in the global economy, including the United States, and its potential impact on future demand. However, conditions changed on Wednesday with the announcement of a record level of US exports.
Sentiment continued to improve on Thursday with the release of a stronger than expected US GDP report and signs of slowing inflation. Moreover, the market also seemed pleased that the Fed could begin to ease its aggressive tightening policy.
These are all potentially bullish signs that could help spur a rally from $92.34 to $93.24 next week. Exceeding this zone will signal that the buying is strengthening.
Looking further ahead, the chances of a rally will increase in November with the start of OPEC+ production cuts and the EU embargo on Russian crude oil.