Market Report & Analysis for 9/27/2018 Morning Edition

Morning Market Overview

Crude oil futures traded at new and fresh intraday highs Tuesday, although pared the advance after U.S. President Donald Trump said the Organization of the Petroleum Exporting Countries were “ripping off the rest of the world” during a speech at the United Nations General Assembly Tuesday.

Trump’s comments follow a meeting Sunday between OPEC and 10 non-OPEC oil producing countries led by Russia that maintained a production agreement despite calls from the president to lift output to lower oil prices in the face of falling output from Venezuela and declining Iranian oil exports amid U.S. sanctions. The OPEC, non-OPEC contingent did agree to lift output to meet the quota targets, with production about 600,000 bpd below their agreement in August. While moving off intraday highs, Brent and ULSD futures settled at nearly four-year highs, West Texas Intermediate futures at an 11-week high, and the RBOB contract at a nearly four-week high. Trump also trained his ire on Iran, saying world leaders should work alongside the United States in isolating Iran. He said the United States was ratcheting up the economic pressure on Tehran to halt their political and militaristic interference in the Middle East.

The president also targeted the leaders of Syria, Venezuela and China for their “rogue behavior.” The United States reimposed sanctions on Iran in early August, with a second and more robust round of sanctions targeting Iranian oil exports and its banking sector to take effect in early November. Following OPEC’s meeting on Sunday, Saudi Arabian energy minister Khalid al-Falih said Saudi oil production has increased this month from the 10.401 million bpd produced in August, and that output would again climb in October.

While not offering numbers, the kingdom’s top oil official said the country would take their cue from demand, according to a report from SP Global.