Monday October 31, 2016
The oil market ended its softest price week of the month on another down note. It shifted lower as the day progressed, on continued worries that OPEC and non-OPEC members will not agree (or adhere) to production cuts in the coming weeks and months. December WTI ended the day down a full dollar (down almost two dollars for the week), and settled at $48.70, the lowest prompt WTI settle this month.
WTI is now officially below the range seen in the last few weeks, though probably not far enough down to consider it having broken through technical support. That is, there is possibly more downside run, with a move to $45 not out of the question (pending more headline comments by various cartel members). Remember, the next official OPEC meeting is not until Wednesday, November 30, a full month away (and two months post-Algiers).
The November RBOB and Heating Oil (HO) futures contracts expire on Monday, and they, too, are ending with a whimper. Both contracts suffered multi-cent losses on the day (and for the week), though RBOB seems to be fading more quickly than does the HO contract. The RBOB market is rather flat over the winter months, while the HO structure remains in significant carry.
Published by PAPCO, Inc. (PAPCO)
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