The April WTI (CLJ25) trading session settled at 67.04 (+0.68) [+1.02%], a high of 68.22, a low of 66.12. Cash price is at 66.37 (+0.04), while open interest for CLJ25 is at 240,252. CLJ25 settled below its 5 day (67.27), below its 20 day (70.02), below its 50 day (71.71), below its 100 day (70.16), below its 200 day (71.17) and below its year-to date (71.92) moving averages. The COT report (Futures and Options Summary) as of 3/4/25 showed commercials with a net short position of -209,828 (a decrease in short positions by +13,731 from the previous week) and non-commercials who are net long +184,222 (a decrease in long positions by -12,701 from the previous week)
June’25 Brent Crude contract settled at 69.88 (+0.90) [+1.30%]
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Crude oil prices surged after reports emerged that the White House is considering a plan to intercept, inspect, and divert Iranian crude oil tankers at sea. This would be based on an international agreement aimed at curbing the spread of weapons of mass destruction, according to unnamed sources cited by Reuters. U.S. Treasury Secretary Scott Bessent stated that the Trump Administration seeks to drastically reduce Iran’s oil exports, warning, “If I were an Iranian, I would withdraw all my money from the rial.” Tehran’s oil exports generated $53 billion in 2023 and $54 billion the year before, according to U.S. Energy Information Administration estimates. Output during 2024 was running at its highest level since 2018, based on OPEC data. The International Energy Agency estimates that Iran pumped about 3.3 million barrels a day of crude in January — about 3% of global oil supply. Kpler data showed Iran’s crude oil exports into China rose to 771,000 barrels per day in February, up from January’s 692,000 b/d.
President Trump took to Truth Social this morning, stating, “I am strongly considering large-scale banking sanctions, sanctions, and tariffs on Russia until a ceasefire and final peace settlement are reached.” Later in the day, Reuters reported that the Trump Administration is exploring ways to reduce sanctions on Russia’s energy sector, in hopes of facilitating a peace deal between Ukraine and Russia, citing two unnamed sources. Bloomberg reported that U.S. and Ukrainian officials are set to meet in Saudi Arabia next week, marking the first direct talks since last week’s meltdown meeting between President Trump and President Zelensky.
President Trump settled on exempting covered USMCA (United States-Mexico-Canada Agreement) goods from his recent 25% tariffs placed on both Mexican and Canadian exports into the U.S.. Officials said the exemptions cover about half of Mexico’s exports into the U.S., while Canada’s covered USMCA goods account for about 38% of their exports into the U.S.. These exemptions will remain in effect until April 2nd, after which Trump has pledged to introduce reciprocal tariffs on Canada, Mexico, China, and the European Union. In response, Canada delayed some of its retaliatory tariffs on U.S. goods, also until April 2nd. A White House official said that oil production not covered under the USMCA will still be subject to tariffs. Per Bloomberg, the U.S. imports roughly 4 million barrels of crude oil per day from Canada, and accounts for more than half of America’s total yearly imports, while the U.S. accounts for about a third of Canada’s total crude oil exports.
Trump posted that “After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay Tariffs on anything that falls under the USMCA Agreement. This Agreement is until April 2nd.” Earlier in the week, Mexico’s President Sheinbaum said she would announce countermeasures this Sunday. Previously Sheinbaum said Mexico would consider “tariff and non-tariff measures in defense of Mexico’s interests” President Sheinbaum said on Thursday that Mexico would be reviewing tariffs on Chinese shipments into Mexico. Per USAfacts.org, Mexico accounts for about 11% of America’s total petroleum exports and 11% of the United States’ total crude oil imports. Pemex data showed that Mexican crude oil exports declined 44% in January, falling to roughly 530,000 barrels per day; last year oil daily oil exports averaged 811,000 barrels.
China’s policymakers are in the middle of their multi-day gathering of their annual National People’s Congress spring session, where earlier in the week the group set an economic growth target of 5% for 2025, China’s Premier Li Qiang said there would be “all out efforts” to hit the country’s expectations, ensuring that their would be a “special action plan” China’s embassy posted on X that “If war is what the US wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end,” Earlier in the week, President Trump added another 10% levy to all Chinese exports into the United States, bringing the total levies to 20%. In response China added additional tariffs of up to 15% on some U.S. products, mainly targeting agriculture commodities. The World Trade Organization said China filed a revised request for consultations over the new 10% tariffs The White House implemented. Previously China had placed a 10% levy on U.S. crude oil. According to EIA data, the U.S. sent China 195,000 barrels per day in November 2024. China’s Shanghai 300 Index declined -0.31%.
OPEC officials confirmed that their April oil output increase would go on as scheduled, although they added that the return could be flexible, saying “Accordingly, this gradual increase may be paused or reversed subject to market conditions. This flexibility will allow the group to continue to support oil market stability.” Russia’s Deputy Prime Minister Novak said today that OPEC could alter their 2025 production increases, quote .“If there is an imbalance in the market, we can always play in the other direction” Currently OPEC is holding back 2.2 million barrels per day, the current plan is to gradually add 138,000 b/d starting in April. In total the 2.2 million b/d cut is just a fraction of the total 5.85 million b/d cut the Cartel has been withholding since 2022, which in total amounts to about 5.7% of global supply.
The Trump administration said it was ending a license that allowed the multinational energy corporation Chevron to operate and export crude oil out of Venezuela since November 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. The White House gave Chevron a deadline of April 3rd to wind down operations in Venezuela. Reuters estimates that Chevron exported roughly 300,000 b/d from Venezuela to the U.S. this past January.
This week’s U.S. Energy Information Administration’s report showed U.S. commercial crude oil inventories increasing by +3.6 million barrels (against a forecast of +0.8mb), to a total of 433.8 million barrels, seasonally inventories are about 4% lower than the 5 year average. U.S. crude oil imports averaged 5.8 million barrels per day last week, a decrease of -106,000 barrels per day. Over the last four weeks, U.S. imports have averaged about 6 million b/d, seasonally that is about 10.7% over the same 4 week seasonal period. U.S. crude oil refinery inputs averaged 15.4 million barrels per day last week, which came in about -346,000 b/d less than the previous week. The EIA said total commercial petroleum inventories decreased by -4.6 million barrels last week. For the third consecutive week the Department of Energy did not add to the Strategic Petroleum Reserve.
This week’s American Petroleum Institute report estimates a crude oil draw of -1.45 million barrels (against a forecast of a draw of -0.64 mb) API estimates a +1.6 million barrel build at the Cushing, Oklahoma Hub.
Today’s Baker Hughes Rig Count showed oil rigs staying the same as last week, year-over-year oil rigs are down 18.
The S&P, Dow Jones and Nasdaq indexes all finished higher in a back and forth choppy session, while the U.S. Dollar Index closed lower by -0.15%
Price Thoughts – The multi-year $65 low range of support has continued to hold over the past few sessions, while $67 and change has begun to look like a new short-term resistance area. Personally, I would be looking to buy any dips if we break back into the $65 handle or low $66 range. President Trump has added a lot of volatility to the markets across the board, and who knows how long these tariffs will or won’t last, or how soon sanctions come off Russia, or how OPEC handles its April production increases, or what happens in the Middle East, or how much new Chinese stimulus boosts their economy. What has really sent us so sharply lower to start the year, has been the nearby lack of global demand and overabundance of barrels available, in addition to cooling economies around the world, which has moved the market to where it is now and potentially pushing prices lower, in my opinion.
$65 has been a major support figure over the last year. To the upside there’s resistance near $67, above that $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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