The June WTI (CLM25) contract settled at 57.07 (-1.02) [-1.73%], high of 60.26, low of 57.81. Cash price is 59.08 (+1.93). Open interest for CLM25 is 257,388. CLM25 settled below its 5 day (58.34), below its 20 day (60.83), below its 50 day (64.53), below its 100 day (67.74), below its 200 day (68.42) and below its year-to date (67.57) moving averages.
The July Brent Crude (QAN25) contract settled at 61.12 (-1.03) [-1.66%], high of 63.21, low of 60.85. Cash price is 62.14 (+1.89). QAN25 settled below its 5 day (61.35), below its 20 day (63.80), below its 50 day (67.59), below its 100 day (70.80), below its 200 day (71.99) and below its year-to-date (70.62) moving averages.
Today’s US Energy Information Administration data for the week ending May 2, 2025 showed US commercial crude inventories had a draw of -2 million barrels, against the API’s forecast of a draw of -4.49 mb, seasonally stocks are about 7% lower than the five-year average. US crude oil production averaged 13.4 million barrels per day. Exports decreased by -115,000 bpd, to a total of roughly 4 million barrels. Crude imports increased by +557,000 bdp, to a total of 6.1 million bdp. US refineries operated at 89% capacity, with input to refineries at 16.1 million bdp. Gasoline stocks increased by +188,000 barrels, to a total of 225.7 million barrels. Distillate fuel stocks decreased by -1.1 million barrels, to a total of 106.7 million. The Cushing, Oklahoma hub had a draw of -740,000 barrels. The US Strategic Petroleum Reserve added +600,000 barrels.
US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet with their Chinese counterparts in Switzerland this weekend to discuss economic issues, a first step toward easing trade tensions. The meetings, announced Tuesday night, mark a thaw in the trade conflict triggered by President Trump’s tariffs. “My sense is that this will be about de-escalation, not a big trade deal,” Bessent said. China suspended all purchases of US crude oil in March amid rising trade tensions with Washington, sparking concerns about demand for American oil. This was the first month since August 2023, and only the second time since March 2020, that China imported no US crude. In February, Chinese imports had averaged 149,000 barrels per day, according to US Census data.
OPEC+ plans to accelerate oil production hikes, potentially adding up to 2.2 million barrels per day (bpd) by November, according to sources speaking with Reuters. On Monday the group agreed to raise output by 411,000 bpd in June, bringing the total increase for April to June to 959,000 bpd. This move represents a 44% reversal of the 2.2 million bpd in cuts made since 2022.
Several banks have updated their crude oil price forecasts for the rest of 2025 and into 2026. Goldman Sachs made a downward revision for 2025, projecting WTI Crude to $56 for 2025, down from $59 a barrel previously expected and Brent crude to average $65 per barrel in Q2 2025, citing a 410,000 barrel per day increase in OPEC+ production and weakening demand trends. Morgan Stanley lowered its oil price projections for the remainder of this year, expecting a larger supply surplus, with the bank forecasting Brent Crude prices to average $62.50 per barrel in both Q3 and Q4, a $5 reduction from its previous estimate. Morgan Stanley estimates that the market surplus could hit 1.1 million bdp in the year’s second half. Barclays has also adjusted its outlook, forecasting Brent crude to average $66 per barrel in 2025 and $60 per barrel in 2026.
The Baker Hughes Rig Count as of May 2, showed US oil rigs decreased by 4, to a total of 479 oil rigs.
Price Thoughts – Crude oil gave back about a dollar of Tuesday’s $2 rebound in another choppy session, despite overnight future gains driven by news that US and Chinese officials will meet for talks this weekend in Switzerland. The recent sharp selloff has largely been driven by headlines around a potential OPEC+ production increase. While bearish pressures remain and continue to weigh on sentiment, I see a potential floor forming around $50 for WTI, with stronger support near $45 if economic data begins to signal a global slowdown and weaker demand. As we head into peak driving season, lower prices could also start to impact the US. production, with unprofitable US rigs (mostly in shale) likely to be taken offline. Last week, Brent crude dropped 8.3%, and WTI fell 7.5% after Saudi Arabia indicated it could endure a prolonged period of lower prices. Both benchmarks have slid to their lowest levels since 2020, losing over 18% in four weeks. Concerns about recession, global trade tensions, retaliatory tariffs, and OPEC+’s production increases have dominated the headlines. Technically to the downside WTI will look to test $55, while upside resistance has shifted to the $60 mark. I believe we’re in for continued choppy trade until more data comes in over the coming month or two. As I always say, this market is currently heavily influenced by the headlines first and foremost, and the weekly US EIA reports to a lesser degree.
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Jim Rinaudo
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