The crude oil market has rallied a bit in the early part of the session, as China is likely to suspend diesel exports in the foreseeable future.
We also have the Non-Farm Payrolls announcement coming out on Friday.
The WTI crude oil market is up just under 1.5% during the trading session on Thursday. There are a lot of things moving it, but the latest development is China’s fuel export suspension being the main catalyst, with places not named Hong Kong or Macau not getting Chinese deliveries from the mainland for the October contract. That means we are tightening supply even further.
The intraday action is technically bullish
Recovering shipments limit the upside argument, though. We are starting to see more shipments coming out of the Persian Gulf, so that is worth watching. But the biggest problem that we have is that refineries have not had enough crude as of late.
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The intraday action is technically bullish. We are sitting right here at the 50-day EMA, as well as the $90 level. All things being equal, there is a lot of back-and-forth choppiness, and the $95 level above is a significant resistance barrier. We also have a nice uptrend line that goes back to the beginning of July.
The jobs number will have a big impact on how interest rates move, but unfortunately, we also have to worry about the latest headline coming out of the Middle East. The next one could be the OPEC+ meeting on Sunday, as most people are expecting unchanged November output targets, but we will see. Any surprise in that could be a big mover.
U.S. diesel policy could be coming into play as well. Ultimately, I am bullish, but I also recognize that there is a lot of noise here, and between now and the jobs report, it is probably going to be difficult to see massive moves without some type of external factor.
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