US housing data comes in stronger than expected
November 20, 2023
Baker Hughes reported that six crude oil rigs came online last week bringing the total number of crude oil rigs to 500. Last year at this time there were 623 oil rigs in operation. So far this year 121 oil rigs have come offline.
Crude oil prices rallied big on Friday after the big decline on Thursday. Reports said that consumer hedgers were in buying on the dip to hedge against price running back up. OPEC+ is talking more about extending production cuts or adding to them to try and support prices. The sentiment seems to be shifting to the idea that in the first quarter of 2024 the market will be oversupplied. As I mentioned last week the forward curve has begun to price the nearby months less that the months farther out. This is an indication of supplies are not needed now but will be in the future so carry the inventory forward.
Despite crude oil’s strong rebound on Friday and higher settled it still posted its fourth consecutive week of losses. Crude continues to trade in its range.
On Friday, the US housing starts and permits for October 2023 came in better than expected offering some positive economic data.
The Financial Times reported that Saudi Arabia is planning to extend its voluntary output cuts into next year. It also reported that an additional OPEC+ cut of up to 1 million bpd could be on the table at the OPEC+ meeting schedule for November 26th. The Financial Times also reported that “The Whitehouse’s chief of energy adviser has said he is confident that Arab oil producers will not weaponize energy, despite mounting anger across the Middle East over Israel’s siege and bombardment of Gaza.