Malcolm Graham-Wood
Independent Analyst
Another bad day at the office for oil market bulls, the prices are now well back through the longer term moving averages and looking vulnerable to more weakness. December Brent expires tonight and at a two month low doesnt look good, indeed with the Fed increasingly likely to raise rates in December crude will remain in a battle with a strong dollar for a while.
The EIA inventory report didnt help, stocks were up 4.2m barrels which was well above estimates and at Cushing up 2.2m barrels, also higher than forecast. Opec came out with an interesting comment, ‘the build in inventories is due to an increase in total supply outpacing growth in world oil demand in the first 9 months of the year’. Never…..! Their demand for Opec crude next year is 30.78m b/d against current production of 30.2m b/d apparently and with the Saudis at 10.3m, unchanged and Iraq at 4m b/d there is little room for Iran in the new year. The IEA is out this morning and it should be noted that these three reports may carry a little more weight than usual as they are the last before the Opec meeting on December 4th.
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