OIL JUMPS AS RUSSIAN FUEL EXPORTS FALL TO 15-MONTH LOW

Oil (WTI) trades at $79.86 and holds cards to close back above $80.

The US Dollar strength is rolling through markets in the wake of Powell's speech later this Friday.

The surprise draw down from Wednesday is seeing follow-through on Thursday and Friday. 

Oil prices are off the low as a double bottom got formed on the back of the big drawdown beat from the oil figures past Wednesday. The WTI Crude Oil price has seen a double bottom being formed at $77.53 with both Wednesday and Thursday price action bounce off of that level. This morning headlines out of Russia are pushing prices back up again as suddenly supply to the market is starting to slow down a touch. 

Crude will be closing off the week with the Baker Hughes US Oil Rig Count. Last week the print of 520 was the lowest since February of 2022. Although Franklin did not really pose a threat to the Texas basin, a further decline in rig count numbers could underpin price action even further in Crude prices. 

At the time of writing, Crude Oil (WTI) price trades at $79.98 per barrel andBrent Oil at $83.98.

Oil news and market movers

As of 14:00 GMT, a lot of headlines are expected out of the Jackson Hole Symposium: US Fed Chair Jerome Powell will give his keynote speech. Next at 15:00 GMT, the Fed’s Patrick Harker will speak alongside Loretta Mester. At 18:00 GMT, the Fed’s Austan Goolsbee will be taking the stage. Half an hour later, the Fed’s Loretta Mester is due to speak again at 18:30 GMT. To round out the week, Christine Lagarde from the European Central Bank (ECB) will speak at 21:00 GMT.

The weekly Baker Hughes US Oil Rig Count for this week will come out at 17:00 GMT. The last print at 520 was another contraction and is at the lowest level since February 2022. Any further drops in rig counts could see an uptick in Crude prices as US production supply is seen further deteriorating. 

A disturbance with a 70% chance of becoming a cyclone is projected to reach Florida some time next week. 

US mulls easing Venezuelan oil sanctions in exchange for improved democracy ahead of elections next year. 

Russian fuel exports are heading for a 15-month low amid increased domestic demand.

Canadian heavy crude weakens as TMX pipeline expansion faces possible delay. 

US officials have acknowledged that they and Iran have a secretive informal deal on oil flows between the two nations. 

Oil Technical Analysis: not out of the woods just yet

The Oil price is ticking up with the Relative Strength Index (RSI) moving away from the mid 50 level. The pickup comes after a floor was found near $77.57 from Wednesday onwards. The surprise cut in oil reserves of over 6 million barrels published on Wednesday has triggered a technical bounce as demand is expected to pick up while supply is steady to lower with Russian oil hitting markets at a 15-month low in volume. 

On the upside, $81.68,  Monday’s high, is the one to beat in order to trigger a small uptrend. Should WTI continue its performance of higher lows and higher highs, pressure could build toward $82. In order to print a fresh monthly high, the peak of mid-August at $84.32 is the one to beat when demand takes over and supply cannot follow suit. 

On the downside, a temporary bottom is being formed around $77.50 and acts as a base for this week. Should the Baker Hughes Rig Count jump substantially higher, expect to see the floor being tested as more supply is bound to come online. Once bears make it through that orange box level, expect to see more downside toward $74 before finding ample support to slow down the sell-off.