The June WTI (CLM25) contract settled at 57.13 (-1.16) [-1.99%], high of 57.70, low of 55.30. Cash price is 58.32 (-0.92). Open interest for CLM25 is 283,282. CLM25 settled below its 5 day (58.66), below its 20 day (60.95), below its 50 day (64.96), below its 100 day (67.93), below its 200 day (68.56) and below its year-to date (67.79) moving averages.
The July Brent Crude (QAN25) contract settled at 60.23 (-1.06) [-1.73%], high of 60.77, low of 58.41. Cash price is 61.33 (-0.79). QAN25 settled below its 5 day (61.61), below its 20 day (63.96), below its 50 day (68.03), below its 100 day (71.01), below its 200 day (72.15) and below its year-to-date (70.83) moving averages.
OPEC+ plans to accelerate oil production hikes, potentially adding up to 2.2 million barrels per day (bpd) by November, according to five sources speaking with Reuters. 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. OPEC+ could fully reverse its voluntary cuts by October if members maintain current compliance levels.
Several banks have updated their crude oil price forecasts for the rest of 2025 and into 2026. 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. Goldman Sachs made a downward revision for 2025, projecting 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. Barclays has also adjusted its outlook, forecasting Brent crude to average $66 per barrel in 2025 and $60 per barrel in 2026.
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. He emphasized that both sides still want to do business.
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.
Last week’s US Energy Information Administration data for the week ending April 4, showed US crude oil inventories had a draw of -2.7 million barrels from the previous week, a large discrepancy from the API’s forecast of a +3.76 mb build. Total US crude oil inventories stand at 440.4 million barrels, seasonally about 6% lower than the seasonal five-year average. Gasoline inventories had a draw of 4 million barrels. Distalties increased by 900,000 barrels. US oil imports declined by 90,000 barrels per day, averaging 5.5 million bpd. Domestic oil production increased, averaging 13.465 million bdp. The US Strategic Petroleum Reserve increased by +1 million barrels.
Price Thoughts – 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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Jim Rinaudo
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