The May WTI (CLK25) contract settled at 60.70 (-1.29) [-2.08%], high of 63.90, low of 58.95. Spot price is 62.02 (-5.01). Open interest for CLK25 is 283,488. CLK25 settled below its 5 day (66.56), below its 20 day (67.76), below its 50 day (69.15), below its 100 day (69.59), below its 200 day (70.26) and below its year-to date (70.22) moving averages.
The June Brent Crude (QAM25) contract settled at 64.21 (-1.37) [-2.09%], high of 67.41, low of 62.51. Spot Brent price is 65.63 (-4.58). QAM25 settled below its 5 day (69.91), below its 20 day (71.07), below its 50 day (72.37), below its 100 day (72.84), below its 200 day (73.98) and below its year-to-date (73.34) 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)
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.
Last Friday, China’s Finance Ministry responded to Trump’s tariffs by imposing a 34% levy on all U.S. goods, which is set to take effect next Thursday. In response, President Trump threatened this morning to impose new 50% tariffs on China unless Beijing lifts its retaliatory duties on U.S. exports by tomorrow afternoon. Posting on his Truth Social account President Trump said “Additionally, all talks with China concerning their requested meetings with us will be terminated! Negotiations with other countries, which have also requested meetings, will begin taking place immediately,” Total U.S.tariffs placed on goods imported from China currently stand at 54%. Asian markets steeply declined on Monday, with the Hang Seng Index declining over 13% and the CSI300 index falling over 7%.
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 week’s 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.
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: 5,062.25 (-0.23%) DIJA: 37,965.60 (-0.91%) NDX: 15,603.26 (+0.10%) DXY: 103.49 (+0.45%)
FTSE100: (-4.38%) DAX: (-4.13%) CSI300: (-7.05%) HSI: (-13.22%) NIKKEI: (-7.83%)
Price Thoughts – The sell off has continued after Friday’s 7% plunge. Global recession are the two words that keep getting thrown around in everything I’m reading and hearing. JPMorgan raised their chances of a global rescission from 40% to 60% this morning and Goldman Sachs now sees a 45% chance as well. Of course if this happens we’ll see demand slow down and growth ease. All of that panic based on the economic disruption (tariff announcements) combined with the eight members in OPEC+ who plan on tripling their production next month have created the fire sale we’ve seen. I have to wonder if we are nearing oversold conditions. Personally I’m sitting on the sidelines for the next couple days to see if things start to level out and broader market volatility cools. I think this could be a buying opportunity for traders as I don’t think we’ll see the global recession impact in the near-term for actual factory production etc., and sub $60 prices offer a buying opportunity in my opinion. Keep in mind U.S. crude oil near this price point is already below the break-even price for many shale companies. Since Wednesday night, crude oil has shed about 14%. Both Brent and WTI were able to fight back a few dollars from their session lows, with WTI notably dipping below $59 in May contracts.
Technically I see near-term support at $59, while short-term resistance looks like $63, above that $65, and if we are able to close above $65 again this week, I believe that multi-year support level will come back into play. As I always say this market is currently heavily influenced by the headlines and weekly EIA reports.
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Jim Rinaudo
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