Looking to the Futures
Crude Stalls On Mixed Geopolitical News
Crude Oil futures finished lower on Wednesday, after a volatile session that saw prices briefly climb above the psychological $100 level. December WTI crude futures (/CLZ26) opened at $98.19, reached an intraday high of $100.40, and fell to a low of $96.26 before settling at $97.15, down 0.69% for the day.
Geopolitical developments continued to drive price action as escalating tensions in the Middle East continue to raise concerns over potential supply disruptions. Attacks on shipping vessels near the Strait of Hormuz and Iranian resistance to renewed diplomatic negotiations with the U.S. helped support prices earlier in the session. However, reports that Russia may be willing to resume U.S.-mediated peace talks with Ukraine eased some supply concerns, contributing to crude's afternoon pullback.
Wednesday's Energy Information Administration (EIA) report provided additional support for oil prices, revealing a larger than expected decline in U.S. crude inventories. Commercial crude stockpiles fell by 3.06 million barrels to 412.5 million barrels for the week ending October 16th. Gasoline inventories also declined by approximately 3 million barrels. Meanwhile, distillate inventories unexpectedly increased by 1.68 million barrels, highlighting mixed conditions across refined petroleum products.
OPEC+ production policy remains another key factor influencing crude prices as well. On October 4th, the group agreed to maintain existing production targets for November, pausing further increases amid continued supply disruptions throughout the Middle East. However, OPEC's latest monthly report showed that combined production rose approximately 900,000 barrels per day in September, led by a recovery in Saudi Arabian output. Despite the increase, production remains below prewar levels, while the group continues to evaluate future output quotas for 2027. Traders will be closely monitoring OPEC+'s next meeting on November 1st for indications of potential changes to production policy.
Technicals
December Crude Oil futures (/CLZ26) remain in a broader uptrend despite Wednesday's decline, trading above all major simple moving averages. The contract settled at $97.15, above its 9-day SMA of $95.98, 20-day SMA of $93.29, and 50-day SMA of $91.50. The 100- and 200-day SMAs sit further below at $85.81 and $84.50 respectively, reinforcing the longer-term bullish trend.
The Relative Strength Index (RSI) finished at 58.42, suggesting bullish momentum remains intact without reaching overbought territory. Trading volume remained elevated on Wednesday with 314,591 contracts traded.
According to the Daily Hightower Report, /CL may find support at 95.47 and 93.93, with potential resistance at the 99.88 and 102.21 levels.
9-Day SMA: 95.98
20-Day SMA: 93.29
50-Day SMA: 91.5
100-Day SMA: 85.81
200-Day SMA: 84.5
14-Day RSI: 58.42
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