The April WTI (CLJ25) trading session settled at 66.31 (-1.95) [-2.86%], a high of 68.10, a low of 65.22. Cash price is at 68.23 (-0.15), while open interest for CLJ25 is at 272,582. CLJ25 settled below its 5 day (68.63), below its 20 day (70.41), below its 50 day (71.79), below its 100 day (70.29), below its 200 day (71.25) and below its year-to date (72.17) moving averages. The COT report (Futures and Options Summary) as of 2/25/25 showed commercials with a net short position of -223,559 (a decrease in short positions by +15,515 from the previous week) and non-commercials who are net long +196,923 (a decrease in long positions by -21,878 from the previous week)
June’25 Brent Crude contract settled at 68.90 (-1.66) [-2.35%]
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Today’s U.S. Energy Information Administration’s weekly 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.
Yesterday, President Trump implemented 25% tariffs on all Canadian and Mexican imports, including a 10% slap on Canadian energy products. Trump also reiterated that reciprocal tariffs would begin on April 2nd and that any countermeasure tariffs placed by Canada or Mexico would be met with reciprocal tariffs. “Please Explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!” President Trump posted on his Truth Social platform. In turn Canadian Prime Minister Trudeau announced his country would put a 25% levy on U.S. goods, affecting $30 billion worth of goods immediately and extending it to $125 billion worth in 21 days. President Trump and Prime Minister Trudeau spoke over the phone today, with Reuters reporting that it was a 50 minute conversation, where the pair discussed tariffs and fentanyl, with Trump posting on his Truth Social account that “The call ended in a “somewhat” friendly manner!” Canada’s Foreign Minister Joly also held talks with U.S. Secretary of State Rubio, where it is reported that she said Canada could potentially use oil and gas exports as a lever if U.S. tariffs continue. 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.
China’s policymakers gathered for the first day of their annual National People’s Congress spring session, setting 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,” Yesterday, 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. 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 rose +0.45%.
As for Mexico, 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” Per USAfacts.org, Mexico accounts for about 11% of America’s total petroleum exports and 11% of the United States’ total crude oil imports.
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.” 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.
Kremlin Spokesman Dmitry Peskov told Bloomberg that “Moscow believes that Washington and Tehran should settle all their differences through talks and is ready to contribute to this”. A U.S. official and another unnamed source told Reuters that the Trump Administration is considering plans to potentially reduce Russian sanctions as a means to stop the war in Ukraine and restore economic ties with Russia, with the Trump Administration asking the State and Treasury departments to configure a list of sanctions that could be eased. Ukrainian President Zelenskyy said in a statement that he wanted to “make things right” and that Kyiv was ready to come to the negotiating table.
The S&P, Dow Jones and Nasdaq indexes all finished higher, while the U.S. Dollar Index closed sharply lower by -1.36%
Price Thoughts – It’s a supply/demand and reserve battle fundamentally right now, but overall we’re being driven by all the international headlines, in my opinion. I continue to lean bearish because of the supply glut and global economic cool downs I believe we’re heading in, but near $65, for the time being, I believe there’s value here if you were looking to get long, as this is near a multi-year low 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 productions 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, 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, and below that has held since about 2022. To the upside there’s resistance near $70, above that $74.50 and the upper $79.50 region. 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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