Energy futures consolidated gains this week with WTI Crude prices resting in their recent range over the $40 mark. Market eyes OPEC+ and supply data, Joe Schulte from Charles Schwab informs.
Key quotes
“Continued weakness in the US dollar has added support with the Greenback hitting levels not seen since mid-2018.”
“A virtual meeting held by the OPEC+ Joint Ministerial Monitoring Committee (JMMC) this week lent support. Comments coming out of the meeting said that compliance to production cuts in July was at 97% conformity and they are committed to achieving 100%. Ministers further stated they see an improving outlook in the global supply and demand situation but remain determined to maintain production cuts to support prices. Current agreed-upon production cuts are set at 7.7 million bpd versus the 9.6 million bpd level in July.”
“Weekly stocks data out this week was mixed but viewed mostly supportive. After the Tuesday afternoon larger-than-expected drop (4.3 mb) in Crude inventories released by the American Petroleum Institute (API), the market absorbed conflicting EIA numbers Wednesday. On the Crude front, supplies showed a smaller-than-expected draw of only 1.63 million. However, the Gasoline numbers came in much better, with a 3.33 million drop more than double market expectations. Distillate numbers were mostly in line with expectations.”
“The trade continues to monitor any pandemic news, rising and falling on each tidbit. The state of negotiations in Washington on a second stimulus package remains in the background with passage offering a potential boost. Likewise, the current deterioration between the US and China on trade issues continues to raise anxieties. Any return to previous trade war conditions would be detrimental to global energy demand.”
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