The May WTI (CLK25) contract settled at 66.95 (-4.76) [-6.64%], high of 70.41, low of 65.98. Spot price is 71.71 (+0.49), open interest for CLK25 is 297,842. CLK25 settled below its 5 day (70.08), below its 20 day (68.22), below its 50 day (69.62), below its 100 day (69.72), below its 200 day (70.40) and below its year-to date (70.49) moving averages.
The June Brent Crude (QAM25) contract settled at 70.14 (-4.81) [-6.42%], high of 73.62, low of 69.47. Spot Brent price is 74.95 (+0.46). QAM25 settled below its 5 day (73.38), below its 20 day (71.49), below its 50 day (72.81), below its 100 day (72.98), below its 200 day (74.12) and below its year-to-date (73.59) moving averages.
The latest COT report (Futures and Options Summary) as of 3/28/25 showed commercials with a net short position of -208,888 (a increase in short positions by 3,580 from the previous week) and non-commercials who are net long +197,061 (a increase in long positions by 10,853 from the previous week)
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Eight of the twelve OPEC+ members, including Russia, Saudi Arabia, the UAE, and Kazakhstan, have agreed to increase oil production by 411,000 barrels per day starting in May. “This comprises the increment originally planned for May in addition to two monthly increments,” the grouping said. This marks a significant revision from the earlier plan, which had called for an increase of 135,000 barrels per day. OPEC+ aims to gradually restore 2.2 million barrels per day of output. The eight countries are set to speak again May 5th to determine their production levels for June.
President Trump declared a “Liberation Day” for U.S. trade policy as he announced a 10% tariff on all imports, with even higher rates for certain countries. The new tariffs will take effect immediately following the President’s announcement. The U.S. is implementing a 34% tariff on China (total U.S. tariffs on Chinese imports stand at 54%), 20% on Europe, and 24% on Japan. Canada and Mexico will be temporarily exempt from the standard 10% tariff. This 10% tariff will only be applied if the original 25% duties imposed on Canadian and Mexican imports are either lifted or suspended. The White House said imports of oil, gas and other refined products were exempted from the new tariffs.
Two members who both sit on the U.S. Finance Committee, Republican Chuck Grassley and Democrat Maria Cantewell, are introducing new legislation seeking to curb President Trump’s ability to impose tariffs without congressional approval within a 60 day period.
Yesterday’s weekly U.S. Energy Information Administration data for the week ending March 28th showed U.S. crude oil inventories grew by 6.165 million barrels (against a forecast of a -0.5mb draw). U.S. oil inventories are about 4% below their five-year seasonal average. Total commercial petroleum inventories increased by 5.4 million barrels. U.S. oil refinery inputs averaged 15.6 million barrels per day, a decrease of -192,000 b/d from the prior week, while oil refineries operated at 86% capacity. U.S. crude oil imports averaged 6.5 million barrels per day last week, an increase of +271,000 barrels per day compared to the week prior. Total products supplied over the last four-week period have averaged 20.1 million barrels per day, down -1.2% from the same time last year. The Cushing, Oklahoma hub was reported to have a build of +2.373 million barrels.
A group of 50 U.S. Senators have drafted a plan to impose a 500% tariff on imported goods from countries who import Russian crude oil, gas and uranium. “These sanctions would be imposed if Russia refuses to engage in good faith negotiations for a lasting peace with Ukraine or initiates another effort, including military invasion, that undermines the sovereignty of Ukraine after peace is negotiated.” the statement said. This week Russia and Ukraine have accused each other of attacking energy facilities, violating the agreed-upon energy ceasefire. Following the latest attack, President Zelensky urged the U.S. to impose additional sanctions on Russia. On Sunday, President Trump warned that buyers of Russian oil could face tariffs of 25% to 50%, stating they could be imposed “at any moment.” As told by NBC, Trump said, “If Russia and I are unable to make a deal on stopping the bloodshed in Ukraine, and if I think it was Russia’s fault … I am going to put secondary tariffs on oil, on all oil coming out of Russia.” He added, “If you buy oil from Russia, you can’t do business in the United States. There will be a 25% tariff on all oil, a 25- to 50-point tariff on all oil.” President Trump said he expects to hold another phone conversation with President Putin soon. According to data from Russia’s Finance Ministry, as reported by Reuters, Moscow’s oil and gas revenue fell by 17% in March compared to the same period last year.
Bloomberg reported, citing tracking data, that global seaborne crude oils increased from the February to March period. Bloomberg estimates that global crude exports averaged 39.92 million barrels per day in March, up by +199,000 barrels per day from February. Canada’s oil flows increased by +190,000 b/d, while Saudi Arabia’s flows fell by -65,000 b/d.
Last Friday’s Baker Hughes Rig Count showed U.S. oil rigs dropping by 2, to a total of 484 in the week ending March 28th. The 484 total is 22 less than this time last year. U.S. gas rigs increased by 1, tota total of 103. The 103 total is 9 rigs less than this time last year. In Canada oil rigs declined by 10, to a total of 108.
SPX: 5,396.52 (-4.84%) DIJA: 40,545.93 (-3.98%) NDX: 18,521.48 (-5.41%) DXY: (-1.60%)
FTSE100: (-1.55%) DAX: (-3.01%) CSI300: (-0.59%) NIKKEI: (-2.77%)
Price Thoughts – A global recession was the hot topic of the day, and OPEC+ added fuel to the fire—perfect for the bears. Unlike natural gas, oil prices saw significant declines that began overnight as markets reacted to Trump’s tariff announcement. I expected prices to continue trending lower this week, especially after yesterday’s bearish EIA report, and that may have been the case, but the tariff announcement was always going to disrupt everything immediately, as we saw unfold. It appears the market was initially hoping for a 10% blanket tariff, as had been rumored earlier. However, when Trump unveiled his tariff strategy with specific rates for each country, the market tumbled in response. The OPEC+ production increase is intriguing, it seems like they’re trying to push out as much supply as possible while prices remain at these levels. To me, that signals a bearish outlook for crude. That said, if WTI drops to $65 or below, it could present a buying opportunity, as the front-month futures contract hasn’t traded below that level since 2021. Technically, today we moved through major moving-averages and were trading through to the downside for both Brent and WTI today.
WTI Crude oil has broken below its $67 long-term support line and Brent just stayed above its $70.00 level. $65 has been a major support figure since 2021. To the upside, there’s resistance in the upper $69 region into $70 handle, above that $74.50 for WTI. 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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