WTI Crude Oil (November)

Last week's close: Settled at 68.18, down 0.51 on Friday and 2.82 on the week

WTI finished off last week's lows, rallying Thursday and Friday to settle back into the meat of its trading range.

A report by the Financial Times last week stated that Saudi Arabia was contemplating increasing production in order to gain market share. Later in the week, rival factions in Libya announced an agreement regarding replacing their central bank head. This agreement would seemingly bring back their offline crude barrels [550k bpd estimated offline]. The two headlines together drove WTI markets to a low of 66.95 for the week from a high of 72 on Tuesday.

This morning, WTI is up +0.08 to 68.24. Outside of China (CSI 300 +8.48%), the rest of the world trade is tilting slightly risk-off this morning.

For the week, OPEC meets on Wednesday for their monthly monitoring meeting, and no new proposals are slated to be discussed outside of current plants for output hikes starting in December. Nonetheless, OPEC meetings can always yield surprises, and attention will be paid to any shift in the pace of scheduled output hikes. The group plans to restore around 2.2mln bpd in monthly tranches between December and late 2025.

Late last week, more reporting on the Financial Times article surfaced, with sources saying that the veiled threats from the Saudis on market share were more aimed at producers within the group who have failed to cut production and have repeatedly produced above their quota [Iraq and Kazakhstan].

Other factors to watch for the week include Israel - Hezbollah’s growing conflict. The latest news on that front includes the assassination of Hezbollah’s newest appointed leader, Hassan Nasrallah, on Friday, which has resulted in continued saber rattling out of Iran. We are watching closely for any signs of direct conflict between Iran and Israel, which could escalate the conflict considerably.

We still like holding the HO Z4-H5 calendar spread we proposed on Friday morning, [-0.81] now trading at -0.51. Regarding flat prices, we advise caution as uncertainty remains around Saudi Arabia’s intentions, and it is in an OPEC meeting this week.

WTI Crude Oil futures traded higher overnight but failed into resistance, aligning with the lows from early last week. Accordingly, we widened this major three-star range to 69.23-69.69. Our momentum indicator aligns at our Pivot and point of balance, and the bulls must continue action above here at....

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