Oil Prices Rally Amid Brazilian Strike, But Traders Expect Downward Correction

Strategic Insights -

Oil prices surged to a seven-week high on Friday, fueled by a fourth day of a Brazilian oil workers' strike, with West Texas Intermediate (WTI) futures for November delivery jumping 41 cents to close at $18.39/bbl on the New York Mercantile Exchange (Nymex). Across the Atlantic, November Brent followed suit, rising 41 cents to close at $17.14/bbl on London's International Petroleum Exchange. However, traders are predicting a downward correction in prices, citing high storage inventories and plummeting natural gas prices. The average price of October gas on the spot market is $1.34/MMBtu, down sharply from $1.95/MMBtu for the same month last year, according to Natural Gas Clearinghouse (NGC) in Houston.

Key Takeaways:

  • Oil prices rallied on Friday, with WTI futures for November delivery jumping 41 cents to $18.39/bbl, and November Brent rising 41 cents to $17.14/bbl.
  • Major oil companies raised their posted crude price 50 cents to $16.75/bbl in response to the rallies.
  • Unleaded gasoline futures for the November contract jumped 1.05 cents to close at 47.19/gallon, while October No. 2 heating oil rose 0.90 cents to 50.22/gallon.
  • Despite the rally, traders expect prices to fall this week, citing high storage inventories and plummeting natural gas prices.
  • November natural gas futures turned bearish and fell half a cent to $1.657/MMBtu, with traders predicting further price declines.
  • The average price of October gas on the spot market is $1.34/MMBtu, down sharply from $1.95/MMBtu for the same month last year, and $1.42/MMBtu for September supplies, according to NGC.
  • Major oil companies raised wholesale prices across the board, with unleaded gasoline rising 0.76 cents to 51.86/gallon, No. 2 heating oil increasing 1.13 cents to 51.69/gallon, and low-sulfur diesel rising 0.88 cents to 53.95/gallon.

Statistics:

  • WTI futures for November delivery jumped 41 cents to $18.39/bbl.
  • November Brent followed suit, rising 41 cents to $17.14/bbl.
  • The average price of October gas on the spot market is $1.34/MMBtu.
  • Unleaded gasoline futures for the November contract jumped 1.05 cents to 47.19/gallon.
  • October No. 2 heating oil rose 0.90 cents to 50.22/gallon.
  • November natural gas futures fell half a cent to $1.657/MMBtu.

Sources:

  • Natural Gas Clearinghouse (NGC) in Houston
  • The Oil Daily
  • Computer Petroleum Corp.