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durablend

(7,463 posts) Tue Oct 4, 2022, 06:24 PM Oct 2022

Crude Sharply Higher On Dollar Weakness And OPEC+ Output Cut Discussions

https://www.barchart.com/story/news/10563023/crude-sharply-higher-on-dollar-weakness-and-opec-output-cut-discussions

Nov WTI crude oil (CLX22) on Tuesday closed up +2.89 (+3.46%), and Nov RBOB gasoline (RBX22) closed up +17.01 (+6.77%).

Crude oil and gasoline prices Tuesday rallied sharply for a second day, with crude posting a 2-1/2 week high and gasoline climbing to a 5-week high. A fall in the dollar index (DXY00) Tuesday to a 2-week low was bullish for energy prices. Also, expectations for OPEC+ to cut its crude production targets when it meets on Wednesday are pushing crude prices higher.

Crude oil prices jumped Tuesday after delegates of OPEC+ said the group is considering cutting production by as much as 2.0 million bpd when it meets Wednesday. The reaction to any cut in OPEC+ crude production may be tempered as a cut in output would not necessarily lead to a commensurate drop in actual barrels since many OPOEC+ producers cannot meet their production quotas in full, given supply constraints. Citigroup estimates that a cut by OPEC+ production of 1 million bpd would only reduce real-world production by 500,000-600,000 bpd.

Strength in the crude crack spread is bullish for oil prices. The crack spread Tuesday rose to a 6-week high, encouraging refiners to purchase crude to refine into gasoline and distillates.(continues...)

There's your October surprise, folks. Bet they'll cut 3 million just to make sure gas prices go sky-high and Republicans get voted back in. Already up 20 cents at one station locally.