At the end of the week, oil growth is weak. Brent on November contracts is trading slightly above yesterday’s closing price; at $50.2. WTI with November delivery is up a little more and is stood at around $47 per barrel. Growth in the quotes is being held back by negative oil reserve stats from the US. According to the EIA, last week’s oil reserves were up by 7.562 million barrels.
Nevertheless, the bulls still have the market. Oil extraction data is supporting the price of oil: the States saw a decrease in extraction last week of 76,000 barrels per day to 9.096 million barrels. Expectations for Baker Hughes stats are also keeping the price up and these factors are due to maintain a rise for oil until the end of the day.
In the medium-term, what the US Fed plans to do with its interest rates is set to affect the oil market. The longer they pore over the decision, the more likely we are to see a rise in oil prices. A few FOMC members spoke this week and from what they said, we have the impression that they can’t come to a unanimous decision. The majority of the commission members are more inclined to thinking that it is too early to put up rates right now.
We believe that growth will gather pace towards the end of the day due to statistics. China will set the tone for next week’s prices, with a special OPEC meeting on 21st October, 2015 also set to have an impact.