December WTI crude oil (CLZ25) today is up +0.35 (+0.57%), and December RBOB gasoline (RBZ25) is up +0.0189 (+0.99%).
Crude oil prices have support today after OPEC+ on Sunday announced the expected December production hike, but then said production hikes will be halted in Q1.
Crude oil prices also have support today from a Ukrainian drone attack over the weekend that left a Russian oil tanker ablaze and damaged oil port facilities in a Black Sea port. Oil prices also have support on recent reports that the US military may be on the verge of launching military strikes on Venezuela, which is the world's 12th largest oil producer.
OPEC+ at its meeting on Sunday announced that members will raise production by 137,000 bpd for December but will then pause the production hikes in Q1-2026 due to the emerging global oil surplus. The IEA in mid-October forecasted a record global oil surplus of 4.0 million bpd for 2026. OPEC+ is trying to restore all of the 2.2 million bpd production cut it made in early 2024, but still has another 1.2 million bpd of production left to restore. OPEC's September crude production rose by +400,000 bpd to 29.05 million bpd, the highest in 2.5 years.
Reduced crude exports from Russia are supportive of oil prices. Ukraine has targeted at least 28 Russian refineries over the past two months, exacerbating a fuel crunch in Russia and limiting Russia's crude export capabilities. Ukrainian drone and missile attacks on Russian refineries and oil export terminals curbed Russia's total seaborne fuel shipments to 1.88 million bpd in the first ten days of October, the lowest average in over 3.25 years. New US and EU sanctions on Russian oil companies, infrastructure, and tankers have also curbed Russian oil exports.
Vortexa reported on Monday that crude oil stored on tankers that have been stationary for at least 7 days fell -11% w/w to 86.91 million bbls in the week ended October 31.
Last Wednesday's EIA report showed that (1) US crude oil inventories as of October 24 were -5.8% below the seasonal 5-year average, (2) gasoline inventories were -2.7% below the seasonal 5-year average, and (3) distillate inventories were -8.4% below the 5-year seasonal average. US crude oil production in the week ending October 24 rose +0.1% w/w to a record high of 13.655 million bpd.
Baker Hughes reported last Friday that the number of active US oil rigs in the week ending October 31 fell by -6 rigs to 414 rigs, modestly above the 4-year low of 410 rigs from August 1. Over the past 2.5 years, the number of US oil rigs has fallen sharply from the 5.5-year high of 627 rigs reported in December 2022.
