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Commodity Market: US Crude Oil hits a 1 1/2-month low as China moves to release crude oil reserves

Futures on US West Texas Intermediate Crude Oil hit a fresh 1 1/2-month trough on Thursday as China announced it was taking steps to release crude oil reserves. The announcement followed a report by Reuters that the United States has asked key crude oil consumers to consider a coordinated release of stockpiles in order to push prices down.

“Should the U.S. administration order an SPR (Strategic Petroleum Reserve) release, that could send a strong political sign,” Citigroup analysts wrote in a client note.

“But … domestic refineries are unlikely to get an extra benefit, as light-end yields appear to have been already maxed out,” they said, while referring to margins for gasoline production and other fuels.

The United States and allies have coordinated strategic petroleum reserve releases in the past, but the current proposal appears to be an unprecedented challenge to OPEC, as it involves the world’s biggest crude importer – China.

As of 9:35 GMT on Thursday WTI Crude Oil Futures were edging down 0.40% to trade at $77.24 per barrel. Earlier in the trading session the black liquid slipped as low as $76.44 per barrel, which has been its weakest price level since October 7th ($74.96 per barrel). WTI Crude Oil Futures have retreated 7.55% so far in November, following an 11.38% surge in October.

At the same time, Brent Oil Futures were edging down 0.22% on the day to trade at $80.02 per barrel. Earlier in the trading session the commodity slipped as low as $79.30 per barrel, which has been its weakest price level since October 7th ($79.10 per barrel). Brent Oil Futures have retreated 4.47% so far in November, following a 6.75% gain in October.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $78.06
R1 – $79.20
R2 – $80.84
R3 – $81.98
R4 – $83.11

S1 – $76.42
S2 – $75.28
S3 – $73.64
S4 – $71.99

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $80.79
R1 – $81.79
R2 – $83.37
R3 – $84.37
R4 – $85.36

S1 – $79.21
S2 – $78.21
S3 – $76.63
S4 – $75.04

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