The May WTI (CLK25) contract settled at 62.35 (+2.77) [+4.65%], high of 62.93, low of 55.12. Spot price is 59.64 (-1.01). Open interest for CLK25 is 258,227. CLK25 settled at its 5 day (62.35), below its 20 day (67.19), below its 50 day (68.71), below its 100 day (69.46), below its 200 day (70.12) and below its year-to date (69.95) moving averages.
The June Brent Crude (QAM25) contract settled at 65.48 (+2.66) [+4.23%], high of 66.02, low of 58.39. Spot Brent price is 62.87 (-1.28). QAM25 settled below its 5 day (65.67), below its 20 day (70.50), below its 50 day (71.94), below its 100 day (72.69), below its 200 day (73.82) and below its year-to-date (73.06) moving averages.
The latest COT report (Futures and Options Summary) as of 4/1/25 showed commercials with a net short position of -195,602 (a decrease in short positions by 13,286 from the previous week) and non-commercials who are net long +185,522 (a decrease in long positions by 11,539 from the previous week)
Crude oil futures jumped to over +4% higher in the session after the White House placed a 90-day pause on the original reciprocal tariff rate, while reducing “some” reciprocal tariffs to 10% for most countries, and increased tariffs on Chinese goods to 125% effective immediately. In a statement posted on his Truth Social Platform President Trump said “Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately.” and “I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.” Reuters reported that top Chinese officials from the State Council and regulatory bodies will hold a meeting, possibly as soon as today, to discuss further measures to boost their economy, domestic consumption and calm their capital markets, citing sources with knowledge of the matter. This morning China placed a 84% retaliatory tariff on the U.S., up from the 34% previously announced. Elsewhere, sources told Reuters that the Trump administration is considering revising its proposed fee on China-linked ships visiting U.S. ports, following a wave of negative feedback from industries warning that the measure could have severe economic consequences. Over the last few days, the Chinese Yuan has fallen to its lowest level against the dollar since 2007.
Today’s U.S. Energy Information Administration data for the week ending April 4, showed U.S. crude oil inventories increased by +2.6 million barrels from the previous week, to a total of 442.3 million barrels, which are about 5% below the 5-year seasonal average. U.S. crude oil imports averaged 6.2 million barrels per day last week, a decrease of 277,000 barrels per day from the prior week, and 6.9% less than the same four-week period last year. U.S. crude refinery inputs averaged 15.6 million barrels per day, an increase of 69,000 barrels per day more than the prior week. Refineries operated at 86.7% capacity. Total products supplied over the last four-week period averaged 19.6 million barrels per day, down -1.9% from the same period last year. Total commercial petroleum inventories expanded by +1.2 million barrels last week. The Cushing, Oklahoma hub had a build of +636,000 barrels. This marks the second week in a row of an increase in U.S. crude oil inventories.
The Keystone pipeline was shut down yesterday after a spill was reported. South Bow Corp. said the situation has been contained and the incident caused an estimated loss of approximately 3,500 barrels, although as of this post the pipeline remains offline awaiting repairs. This is the third spill since 2017. On a daily basis the Keystone XL pipeline carries about 626,000 barrels of crude oil per day.
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. A Reuters survey released this morning estimates OPEC’s oil output in March fell by 110,000 barrels per day compared to February, bringing total production to 26.63 million b/d, with Iran, Venezuela and Nigeria each having a decline of 50,000 b/d.
Over the weekend Saudi Arabia lowered the price of its Arab Light crude oil to Asia, by $2.30 per barrel for buyers in May, which marks a $1.20 premium above the Oman/Dubai average. This was the largest price cut since 2022 and is the second price cut by Aramco over the last two months.
On Sunday Goldman Sachs lowered its WTI oil price forecast for December 2025 by $4 to $58 per barrel, with an average of $55, and $62 per barrel for Brent, with an average barrel price of $58.
Last Friday’s Baker Hughes Rig Count showed U.S. oil rigs increased by 5, to a total of 489, which is the highest total since this past June. U.S. gas rigs fell by 7, to a total of 96, and the biggest weekly decline since May 2023 and lowest total since this past September. Seasonally the total rig count is about 5% compared to this time last year and 20% lower.
SPX: 5,456.90 (+9.52%) DIJA: 40,608.45 (+7.87%) NDX: 17,124.97 (+12.16%) DXY: 103.04 (+0.08%)
FTSE100: (-2.46%) DAX: (-2.46%) CSI300: (+0.99%) HSI: (+0.68%) NIKKEI: (-3.93%)
Price Thoughts – Markets were trading -3% lower before exploding on news that the White House would reduce reciprocal tariffs to 10% for 90-days, while raising China’s tariffs to 125%. Causing the biggest rally in the U.S. stock indexes in FIVE years, and the third largest single day gain since WWII. Fundamentally it was another week where the API forecasts did not come in line with the official EIA data, as API’s numbers were fundamentally bullish and EIA’s were fundamentally bearish. Not like any of that matters, with headlines of tariffs coming on/off causing massive swings across the markets. I still expect debate to continue whether there will be a “Global Recession” over the coming months. But in the meantime it does appear that a major trade war has begun between the two biggest economies in the world.
Technically I see near-term support at $59, while short-term resistance looks like $63, above that $65. New short term support is in the $56 handle. As I always say, this market is currently heavily influenced by the headlines first and foremost and the weekly EIA reports to a lesser degree.
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Jim Rinaudo
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