- Stock market recovery helps commodities recover on Thursday.
- Russia’s Novak thinks oil market is in balance.
- Saudi OPEC governor says market could shift to oversupply in Q4.
Supported by an improving market sentiment, crude oil prices started the day on a positive note and the barrel of West Texas Intermediate recovered to $67.62 during the European trading hours. Although the WTI lost its momentum and retreated back toward the $67 handle after Saudi OPEC governor Adeeb Al-Aama told Reuters that the oil market could shift into oversupply in the last quarter of the year, Wall Street’s strong performance provided a boost in the second half of the day. As of writing, the barrel of WTI was up $1.1, or 1.65%, on the day at $67.45.
Following yesterday’s heavy sell-off, major equity indexes opened the day in the positive territory and built on the strong start to stretch higher in the session to help ease concerns over the potential negative impact of economic slowdown on oil demand. “The stock market coming back is definitely cheering people who want to focus on the demand side. It’s erasing fears that demand will fall off the map,” Phil Flynn, an oil market analyst at Price Futures Group in Chicago, told Reuters.
Earlier in the day, Russia’s Energy Minister Alexander Novak argued that the oil market was in balance and further stated that they were ready to continue to cooperate with OPEC and non-OPEC producers.
The next data of importance for crude oil will be tomorrow’s weekly Baker Hughes oil rig count.
Technical levels to consider
The first technical resistance for the WTI aligns at $68 (Aug. 22 high) ahead of $69.30 (Aug. 24 high) and $70 (psychological level/50-DMA). On the downside, could be seen at $65.70 (Oct. 23 low), $64.50 (Aug. 15 low) and $63.60 (Jun. 18 low).
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