WTI $47.15 +$2.56, Brent $49.75 +$3.12, Diff $2.60 +54c, NG $2.66 -7c

Oil price

Having been away on company visits for a couple of days and written no blogs I return to find the oil market in a slightly cheerier mood. Obviously world markets are looking to the Fed for the long awaited decision on interest rates, from what I can gather from the assorted experts such as Marcus Ashworth, (now Head of Fixed Income at Haitong) it would almost be better just to get a small rate rise into the market just to avoid this rather painful dithering. Anyway, 7pm tonight London time is when to be standing by I understand.

Crude markets have picked up by more than three dollars in the last two days, primarily due to the latest inventory stats from Genscape, API and yesterday the EIA. The EIA number is normally the most accurate and showed a crude draw of 2.1m barrels whereas the analysts consensus guess was for a build of 1.8m barrels. This was, believe it or not the biggest draw in seven months as refiners upped their runs for the first time since July but stocks are still at very high levels. The result was more interesting as it was the first ‘clean’ week since the driving season ended and at a time when refiners are starting to reduce capacity ahead of the autumn maintenance season, less gasoline and more heating oil will be the order of the day in a month or two. On the subject of gasoline the figures also showed a large, three million barrels, build in products which is slightly disturbing and will need to be watched. Finally while I was away from the desk October Brent expired, WTI had been creeping up towards parity as that market has been slightly firmer in recent days, that has picked up slightly again.

It is also worth noting that if you are a follower of technical analysis then WTI is beginning to look very interesting. I have mentioned this before recently but it does appear to be breaking out of a mature pattern, which means that should WTI break above $48 now it would be in the second stage rally of five legs. Now I am no expert so if you find it interesting it may be worth taking a look at those charts…

Faroe Petroleum

Faroe has this morning announced the results of…

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