November Crude Oil
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After a lackluster start, November Crude Oil futures are in a position to finish the week higher, buoyed by a surprise inventory drawdown. A weaker U.S. Dollar ahead of the September 17, Federal Reserve monetary policy statement also helped underpin prices. A strengthening labor market was also supportive.
The futures market traded mostly sideways as many of the major players took to the sidelines ahead of the Fed statement. This led to a weaker trade early in the week, driven by below average volatility and volume. Volatility returned to the market on September 16 after the release of a bullish weekly inventories report from the U.S. Energy Information Administration. The report also showed the largest crude drawdown in 7 months at the major U.S. hub in Cushing, Oklahoma.
According to the EIA, total U.S. inventory dropped 2.1 million barrels for the week ended September 11. Speculators and traders were looking for an increase of 0.7M to 1.2M barrels.
Although the report was able to trigger a 5.75 percent rally, gains were limited because of concerns over the global supply glut, mixed supply/demand outlooks from the EIA, the IEA and OPEC and an unexpected build in gasoline and distillate stocks.
Speculators did provide some support in reaction to reports confirming that U.S. Special Operations Forces troops are now on the ground in Syria assisting Kurdish Forces…