Oil and Gas Market Summary 9-21-16 from OilPricesDaily.com

Oil Prices Daily

Oil prices daily podcast discusses all of the news, events, and trends influencing oil prices each day.

Be sure to visit today’s oil prices daily newsletter for links to all news stories and sources mentioned in this podcast.

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Links:

Oil jumps after third surprise weekly US crude draw Reuters

Fed leaves rates unchanged, signals 2016 hike still likely Bloomberg

Weekly Petroleum Report Highlights EIA

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Transcript:

Hello and welcome to the Oil Crisis Daily Podcast. Doug Stetzer here, bringing you your daily recap of all the latest news, events and trends influencing oil prices.

Oil Prices Daily is brought to you by EKT Interactive’s Oil 101, a free online introduction to the oil and gas industry.

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All right, let’s talk about what happened today in oil prices for September 21st, 2016.

Well, well, well, what did the EIA have for us today, but another huge surprise draw in crude oil inventories.

If you remember from yesterday’s podcast and yesterday’s newsletter, analyst expectations were for a build of just over 2 million barrels, maybe 2.3 million barrel consensus, in crude oil inventories.

The EIA reports a draw of 6.2 million barrels, so on the heels of the huge surprise draw a few weeks ago, not seeing the builds we expected on the heels of that, drawing again here, really lending support to the market, giving it a little direction ahead of the upcoming OPEC meeting.

What are the numbers?

First of all, we’re talking about November crude today, October crude expired yesterday; November is now the front month. November traded higher by a $1.29, or 2.4% to settle at $45.34.

Trading volume was pretty good, by recent standards, with just right about a million contracts changing hands.

What does this move do for where we are technically, and just getting a little bit of an understanding of where we are in the November contract?

Definitely got us off those $43 lows, still in the middle of what would be considered a range-bound trade. Some support in the market, yes; a new trend, not yet.

Next key resistance level here would be right at about $48, that’s going to be a key level, with really anything between $43 and $48, still going to be considered just range-bound and drifting around.

We’ll have to wait and see, if this is really lending what traders will consider enough support and enough conviction to break out of this range. Again, we’re rallying into a very oversupplied market, we are still seeing OPEC producers talking about freezing at all time high production levels.

One of the things I didn’t see mentioned in the news, but if you dig into the report, the US petroleum balance sheet for this week, actually did show that US production notched another small gain, both in Alaska and in the lower 48.

Is this thing really going to get legs into this supply situation? We’ll just have to wait and see.

What else was going on there today? Of course, in today’s newsletter there’s links to some news stories summarizing this data, and also links to both the weekly petroleum report highlights on the EIA website, as well as the US petroleum balance sheet from the EIA.

You can find links to both of those resources, right in today’s newsletter.

What about OPEC?

Nothing too much new out of OPEC, that I saw. We started seeing yesterday, information start to coalesce around this idea, that the Algeria meeting is just a consensus building, and not to expect any decisions out of that.

The only thing I really saw today that was a bit interesting, was the UAE Minister coming out and warning OPEC against any hasty decisions that might be taking a short term view.

A quote from this Bloomberg article saying, “We need to be cautious not to do something that is a quick solution, and that is not going to last.” Really talking about taking a sustainable approach to production, quotas, everything like that.

Again, really nothing too dramatic, but just another voice on the topic there.

As far as other key news out today, the other story that just happened actually after the markets were closed, was the the Feds decided to leave the rates unchanged.

The Fed report, probably going to lead to some strength in the equities markets, and some overall strength in financials. Leaving these rates unchanged, is signaling pretty strongly that we’ll see at least one hike, sometime in the rest of 2016, with a target of half a percentage point for the fed funds rate by the end of the year.

There were more dissenting votes than have been in the past to this, to the consensus, so it really looks pretty strongly that something’s going to happen at the next meeting.

They wanted to keep an eye on strength in the US job market for another quarter, I guess.

Really, those are the main things we saw today; EIA just really surprising the markets, the analysts have been caught off guard; they’re just really kind of unpredictable at this point.

The fed leaving rates unchanged, which was pretty widely expected. You can probably expect to see some action in the next meeting there, which would be really interesting to see how equity markets and financials start adjusting ahead of that.

That’s it.

As always, let us do the heavy lifting for you.

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Thanks a lot, and we will see you tomorrow.

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