Chinese Manufacturing Data Was Bearish for October
October 31, 2023
Friday WTI crude oil rallied to the top of its recent trading range on some bullish headlines. Nothing major happened over the weekend and today the prices sold off to the bottom of the recent trading range. With all the uncertainty the downside is probably somewhat limited but for now $80 would be a fair target. So far today prices have rebounded and are trading higher. The EU reporting a slower rate of inflation is supporting the rebound for now. EU inflation was at its lowest in two years for October at 2.9%.
China’s manufacturers reported an unexpected downturn in business activity in October. The purchasing managers index slipped to 49.5 down from 50.2 in September. It was the first monthly decline for five months since May 2023.
Russia plans to increase its diesel shipments form its main western ports by more than half next month as the country’s oil refineries process more crude, its domestic fuel market stabilizes, and an export ban is reversed.
Traders said that high retail diesel prices in the US Midwest are drawing more supplies from the Gulf Coast and Chicago pipeline that should ease supply worries and lower prices. According to GasBuddy.com, diesel prices reached $4.87 per gallon in Minnesota on Thursday, nearly 11% increase from last month. Fuel traders and brokers said maintenance-related outage at Phillips 66’s 208,000 bpd Ponca City refinery in Oklahoma has caused the Midwest price increase across Minnesota, Iowa, and Kansas. The refinery’s return to production on October 22nd has helped ease spot diesel prices in the Group 3 market to a discount of 2 cents against futures. More diesel from the area including Chicago and the Gulf Coast also helped soften the premiums. However, Midwest diesel inventories remain tight and could pose a problem if any more refining snags hit.