The Nov WTI trading session settled at 68.17(-0.01) [-0.01%], had a high of 69.32, a low of 67.57. Cash price is at 68.13(+0.46), while open interest for CLX24 is at 329,816. CLX settled below its 5 day (69.18) , its 20 day (68.82), 50 day (72.09), and its 200 day (74.88) moving-averages. The COT report (Futures and Options Summary) as of 9/27 showed commercials with a net short position of -209,236 (a increase in short positions by 10,199 compared to last week) to non-commercials who are net long 191,109 (a increase in long positions by 15,981 compared to last week).

Finishing the month with a flat session while finishing with the biggest monthly loss for crude since October of last year. The COT report from Friday showed the commercials getting shorter while the Specs got longer.
 

From what I've read this U.S. port strike, which begins tomorrow, will mainly affect retail supply chains but it could create congestion at working ports and cause a reverberation in other supply chains, ergo affecting the energy markets. The strike totals 36 ports with 45,000 workers affected, accounting for ~60% of U.S. shipping traffic and Goldman Sachs analysts say it could cause roughly $5 billion of economic damage per day. In my opinion the big 3 stock indexes aren’t pricing this in enough, especially if this turns into a slog before a deal is reached. 

In the Middle East Libya’s oil production is set to resume tomorrow and be fully operational by Wednesday after the two rival governments reached an agreement last week. As for the Middle East war-premium it seems to me traders are waiting for a buildup of military personnel in the Strait of Hormuz rather than trading the current escalation via bombing and verbal barbs between Israel, Hamas, Hezbollah and Iran. We’ll see what happens when Israel begins sending in ground troops to Lebanon, which I think is going to happen sooner rather than later. 

According to the U.S. Bureau of Safety and Environmental Enforcement, 3% of crude oil production and 1% of natural gas production in the Gulf of Mexico is still offline following Hurricane Helene. It’s worth mentioning The National Hurricane Center is tracking 5 new storm systems in the Atlantic basin as of this morning, with tropical storm Kirk forecasted to become a hurricane within the next 5 days.

I still see the ceiling waiting to be broken for WTI around ~$72, with the floor moving slightly lower to ~$65. It should be noted that the last time we tested sub $64 prices was in May of 2023. 

Jim Rinaudo

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Walsh Trading

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