Oil Recovers as U.S. Refining Takes of it’s Waterwings

U.S. refining makes a rapid comeback in a supportive development for WTI in particular.

Oil traded positively on Friday with WTI, in particular, the star, pulling itself up off the floor as U.S. refining production restarts in earnest following the passing of Hurricane Harvey. With the storm having passed, it appears that damage to refining capacity is minimal and with only 5.50% now offline from fully 25% a week ago, traders are hopeful that crude backlogs will be cleared, taking the pressure of both WTI and gasoline futures. The Brent/WTI spread has also closed from a six dollar premium to an only four dollars this morning.

WTI

WTI spot trades unchanged in Asia at 47.50 having regained its 100-day moving average at 47.30 in a positive technical development. Support is at 46.50 with resistance at 48.70.

WTI Daily

BRENT

Brent spot continues to trade constructively to start the week, opening at its previous longer term resistance at 52.70. It now appears poised to attack resistance at 53.50 which could begin a move to the 55.00 area. Support appears at 52.40 initially.

Brent Daily

Both contracts will be vulnerable to North Korean headlines this week, with any signs of escalation from this weekend’s events potentially giving the oil a significant tailwind.

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Jeffrey Halley

Jeffrey Halley

Senior Market Analyst - Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley