The May WTI (CLK25) contract settled at 69.11 (+0.83) [+1.22%], high of 69.33, low of 67.95. Spot price is 68.27 (+0.19), open interest for CLK25 is 329,553. CLK25 settled above its 5 day (67.84), above its 20 day (67.47), below its 50 day (70.40), below its 100 day (69.64), below its 200 day (70.54) and below its year-to date (70.58) moving averages.
The June Brent Crude (QAM25) contract settled at 72.37 (+0.76) [+1.06%], high of 72.56, low of 71.27. Spot Brent price is 72.16 (+0.16). QAM25 settled above its 5 day (71.20), above its 20 day (70.64), below its 50 day (73.49), below its 100 day (72.93), below its 200 day (74.30) and below its year-to-date (73.65) moving averages.
Last week’s COT report (Futures and Options Summary) as of 3/18/25 showed commercials with a net short position of -205,308 (a decrease in short positions by 7,321 from the previous week) and non-commercials who are net long +186,208 (a decrease in long positions by 8,116 from the previous week)
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President Trump said the U.S. would be imposing a 25% ‘Secondary’ tariff on Venezuela, and a 25% tariff on “any Country that purchases Oil and/or Gas from Venezuela” On Truth Social President Trump said the ‘Secondary’ tariff would take effect on Venezuela buyers on April 2nd. Additionally, the Trump administration revealed that it would extend a license for Chevron until May 27th. This license, which was originally set to expire on April 3rd, permits the multinational energy corporation to operate and export crude oil from Venezuela, which Chevron has been doing since November of 2022 Last year an average of 220,000 barrels per day were imported into the U.S. out of Venezuela, representing about 3.5% of all U.S. crude imports. Reuters reported that Chevron exported roughly 300,000 b/d from Venezuela to the U.S. this past January, a five-year high.
Over the last two days, U.S. and Russian officials have gathered in Saudi Arabia to hold discussions in the ongoing attempt to wind down the Russian-Ukrainian war. Kremlin spokesman Dmitry Peskov said officials discussed potentially resuming the ‘Black Sea Initiative,’ a ceasefire agreement that aims to secure the safety of merchant shipping in the Black Sea. Despite reports of Russian attacks on Ukrainian infrastructure and vice versa over the past week, both Russian President Putin and President Zelenskyy agreed to a 30-day suspension of attacks.
Last Thursday the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a “teapot” oil refinery and its CEO for purchasing and refining hundreds of millions of dollars’ worth of Iranian crude oil. This includes oil from vessels connected to the Houthis and the Iranian Ministry of Defense and Armed Forces Logistics (MODAFL). OFAC imposed sanctions on 19 entities and vessels responsible for shipping millions of barrels of Iranian oil, which are part of Iran’s “shadow fleet” of tankers supplying refineries like China’s Luqing Petrochemical. OFEC placed sanctions on China’s teapot refinery Shandong Shouguang Luqing Petrochemical in the Shandong Province, which has purchased millions of barrels of Iranian oil, valued at around half a billion dollars. Luqing Petrochemical received Iranian oil transported by shadow fleet vessels, some of which had already been sanctioned for their role in transporting petroleum linked to the Houthis. According to Kpler, February Iranian crude oil exports surpassed 1.8 million barrels per day. China’s Shanghai 300 Index closed higher by +0.51%.
OPEC+ issued a new schedule for seven members of the cartel, including Russia, Iraq and Kazakhstan to make further crude output cuts in order to meet agreed levels for the upcoming April OPEC+ production increases. The new plan outlines monthly cuts ranging from 189,000 barrels per day to 435,000 bpd. These cuts are scheduled to continue until June 2026. OPEC+ is set to increase output by 138,000 bpd in April.
Last week’s U.S. Energy Information Administration weekly report showed U.S. crude oil inventories had a build of +1.7 million barrels (much lower than API’s build of +4.593 million barrels estimate), to a total of 437 million barrels. Seasonally inventories are about 5% lower than their five-year average. U.S. crude oil imports averaged 5.4 million barrels per day last week, a decrease of -85,000 bdp compared to the week prior. U.S. oil refinery inputs averaged 15.7 million barrels per day, a -45,000 bpd decline compared to the prior week, refineries operated at 86.9% capacity last week. Total commercial petroleum inventories increased by +1.6 million barrels last week. Total petroleum products supplied over the last four-week period have averaged 20.6 million barrels per day, up +2.5% year-over-year. U.S. crude oil inventories have had builds 7 out of the last 8 weeks.
Last Friday’s Baker Hughes weekly rig count showed the number of U.S. oil rigs decreased by -1, to a total of 486, year over year it is -23 rigs lower. U.S. gas rigs increased by +2, to a total 102. This was the first time U.S. energy companies added to rigs in three weeks.
The Dow, S&P and Nasdaq all closed higher, supported by the news that the April 2nd reciprocal tariffs may be more “targeted” than previously thought. The Dollar Index settled at 104.31 (+0.21%).
Price Thoughts – U.S. markets seemed upbeat in general across the board after reports, from anonymous sources in the White House, are saying the April 2nd reciprocal tariffs won’t be as broad as previously thought, later Trump so much as confirmed that, saying “I may give a lot of countries breaks on tariffs.” News of the day other than that for crude oil was the Venezuela tariffs, but was capped to the upside because of last week’s Iranian sanctions and the ongoing peace talks going on in Saudi Arabia, which could bring back Russian production in an already somewhat oversupplied market, in my opinion. I expect there could be some pull back if EIA and API numbers come in bearish this week.
WTI Crude oil has broken above its $67 long-term support line, while Brent has sustained above its $70.00 level. Again the headline trading is leading the market moves, while the global supply/demand and weakening USD situation has set a ceiling and floor, in my opinion.
$65 has been a major support figure over the last year, with today’s settlement we may find ourselves with a new support at $67. To the upside there’s still resistance in near the upper $69 region into $70, above that $74.50. Longer term I think we are still leaning more into the $65-$75 range rather than the $70-$80 range for 2025 for WTI.
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Jim Rinaudo
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