UK Re-enters Lockdown, Libya Ups Crude Production
November 2, 2020
The Baker Hughes Rig Count said oil rigs were up 10 to a total of 221. The rig count has been going up slightly the last few weeks adding to the speculation that US production would increase.
The market was down big early this morning with RBOB and ULSD down close to $0.06 cents per gallon. But prices have now recovered and sit only down a couple cents as they wait for the day to get going. With the election tomorrow it is very likely the market is stuck in a very tight trading range until some headlines on the election of other hot news hits the wires.
The news that of the United Kingdom going into lock down and Libya rising production were the events putting pressure on price.
Libya’s production is being reported at 800,000 bpd and it is increasing towards its target of 1 million bpd. If this trend continues OPEC will certainly have to address this at its meeting at the end of the month.
S&P Global reports that floating storage levels of Brent, Forties, Oseberg, Ekofisk, and Troll crude oil grades in Northwest Europe have edged up to their highest levels since the peak of Europe’s coronavirus lockdown from March to June, according to intelligence company Kpler. Trading companies, including majors are making inquiries to charter very large crude carriers to carry diesel with 10 parts-per-million (PPM) sulfur for up to six months, indicating that diesel floating storage could rise again.
The Commitment of Trader report showed that managed money funds in the oil market cut their net long position in the week ending October 27th. The funds cut their net long position by 36,589 contracts on the week to 287,723 contracts on a combined NYMEX and ICE futures and options basis.