Technical & Fundamental Oil Reports Specialists

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A second fright for shorts

Published Wednesday, November 25th, 2015

The oil market has taken events in Syria, where there are war planes of different nations weaving between each other, remarkably calmly. They have not deterred speculators from taking big bets on the short side. However when a Russian plane is downed by a Nato ally that changes the picture and the risk. Turkey’s actions yesterday triggered a renewal of the previous day’s short covering rally, which had been set off by misleading headlines on Saudi oil policy.

A Thanksgiving holiday, the possibility of more OPEC rumours and President Putin vowing “serious consequences” is enough to make even the most relaxed short think better about their position and indulge in a bit of trimming. The covering pushed Brent up to a high of $46.50 (+1.67) and WTI to $43.46 (+1.93). Additional tail wind came from gasoline which had a strong rally on news of delays to the re-start of Irving oil’s cat cracker at its St. John, New Brunswick refinery.

Brent closed +1.29 at $46.12 bbl and WTI +1.12 at $42.65 bbl. Gasoline closed +7.68 cts/gal at 139.02, hitting a high earlier in the day at 140.65. After the close the API revealed a weekly crude build of 2.6 million bbls with Cushing +1.9 million. Gasoline built 1.4 million bbls and distillates 690,000 bbls.

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Posted by David Hufton