The June WTI (CLM25) contract settled at 59.09 (+1.96) [+3.43%], high of 59.84, low of 57.03. Cash price is 57.15 (-1.17). Open interest for CLM25 is 268,635. CLM25 settled below its 5 day (58.39), below its 20 day (60.88), below its 50 day (64.74), below its 100 day (67.85), below its 200 day (68.49) and below its year-to date (67.68) moving averages.
The July Brent Crude (QAN25) contract settled at 62.15 (+1.92) [+3.19%], high of 62.80, low of 60.19. Cash price is 60.25 (-1.08). QAN25 settled below its 5 day (61.36), below its 20 day (63.87), below its 50 day (67.80), below its 100 day (70.92), below its 200 day (72.07) and below its year-to-date (70.73) moving averages.
Today’s American Petroleum Institute’s weekly data forecasts US commercial crude inventories had a draw of -4.49 million barrels, against a forecast of a -2.5 mb draw. Gasoline with a draw of -1.97 million barrels. Distillates are seen to have had a build of +2.24 million barrels. The Cushing, Oklahoma hub with a draw of -854,000 barrels and the US Strategic Reserve added 600,000 barrels.
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.
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.
President Donald Trump suggested that trade deals could be struck with some countries this week, offering relief from potential US import duties. He also indicated that he has no immediate plans to speak with Chinese President Xi Jinping. Trump mentioned he might eventually lower tariffs on China, acknowledging that current tariffs have nearly halted trade between the two largest economies.
US crude oil production saw a modest increase in February, according to data released last week by the US Energy Information Administration. US production rose to 13.16 million barrels per day, an increase of 29,000 bdp from January.
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 recovered $2 after a deep sell off fueled by the OPEC+ headline, in my opinion, crude had gone into near-term oversold territory. Still there are a lot of bearish storylines that should continue to plague oil bulls, but I do believe there’s somewhat of a floor near $50, and possibly even $45 if hard data starts point to a global cooldown period and thus weaker demand, for WTI as we enter peak driving/consumption season and the fact that the lower we go the harder it will be for US rigs to turn profits, which in turn means less rigs online. 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 a choppy week here. 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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