Outlook: WTI and Brent moved to trade more than $1.00 higher but are fading into mid-morning. Products are off their highs as well. Fundamentals of tightening supply, particularly of crude in the Cushing, OK hub remain supportive. An infrared fly-over view of Cushing, OK storage suggests from Friday Oct 22 to Friday Oct 29, inventories fell nearly 1 million barrels. However, from Tuesday Oct 26 to Friday Oct 29 inventories were viewed up near 850,000 barrels, which has cooled today’s earlier run-up. Although the greater risk is to the upside, there will likely be reluctance by trade to establish a fresh directional position in front of the OPEC+ decision on Thursday and choppy trade can be expected. OPEC+ members seem to favor keeping the production schedule of adding 400,000 bpd in December in place. But growing displeasure from consuming nations about the failure of OPEC+ to add the planned additions in recent months and their call for OPEC+ to do more to stem the price run-up may factor in the decision. A Bloomberg survey suggests OPEC output in October rose only 140,000 bpd to 27.58 million bpd, short of what was planned due to outages in African production.
Crude inventories in China appear to be declining, data from a number of companies suggests, which could prompt a more aggressive push refill in the coming months.
