The May WTI (CLK25) contract settled at 69.65 (+0.65) [+0.94%], high of 70.22, low of 69.06. Spot price is 69.03 (-0.09), open interest for CLK25 is 327,621. CLK25 settled above its 5 day (68.87), above its 20 day (67.56), below its 50 day (70.19), below its 100 day (69.69), below its 200 day (70.51) and below its year-to date (70.54) moving averages.
The June Brent Crude (QAM25) contract settled at 73.06 (+0.67) [+0.93%], high of 73.49, low of 72.47. Spot Brent price is 73.03 (-0.01). QAM25 settled above its 5 day (72.22), above its 20 day (70.74), below its 50 day (73.30), above its 100 day (72.97), below its 200 day (74.27) and below its year-to-date (73.62) moving averages.
Last week’s COT report (Futures and Options Summary) as of 3/18/25 showed commercials with a net short position of -205,308 (a decrease in short positions by 7,321 from the previous week) and non-commercials who are net long +186,208 (a decrease in long positions by 8,116 from the previous week)
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Today’s U.S. Energy Information Administration’s weekly petroleum status report showed commercial crude oil inventories with a draw of -3.3 million barrels last week (against a forecast of a -1.6 million barrel draw), to a total of 433.6 million barrels, inventories are about 5% below their five-year seasonal average. U.S. crude oil imports averaged 6.2 million barrels per day, an increase of +810,000 barrels per day from the previous week. U.S. oil refinery inputs averaged 15.8 million barrels per day, and +87,000 barrel per day increase, while refineries operated at 87% capacity. Total products supplied over the last four-week period averaged 20.2 million barrels per day. Total commercial petroleum inventories grew by 3.2 million barrels. The U.S. Strategic Petroleum Reserve increased from 395.9 million barrels to 396.1 million barrels.
Both Russia and Ukraine said they have agreed to a U.S. backed ceasefire agreement, implementing the ‘Black Sea Initiative’ which aims to “ensure safe navigation, eliminate the use of force, and prevent the use of commercial vessels for military purposes in the Black Sea.” About 2-3 million barrels per day of crude oil and oil products pass through the Black Sea. Despite reports of Russian attacks on Ukrainian infrastructure and vice versa over the past week, both Russian President Putin and President Zelenskyy agreed to a 30-day suspension of attacks last week.
President Trump said the U.S. would be imposing a 25% ‘Secondary’ tariff on Venezuela, and a 25% tariff on “any Country that purchases Oil and/or Gas from Venezuela” On Truth Social President Trump said the ‘Secondary’ tariff would take effect on Venezuela buyers on April 2nd. China, who already has a 20% tariff placed on them, is the biggest buyer of Venezuelan oil and is estimated to be importing about 500,000 barrels per day of crude oil and fuel from Venezuela. Additionally, the Trump administration revealed that it would extend a license for Chevron until May 27th. This license, which was originally set to expire on April 3rd, permits the multinational energy corporation to operate and export crude oil from Venezuela, which Chevron has been doing since November of 2022 Last year an average of 220,000 barrels per day were imported into the U.S. out of Venezuela, representing about 3.5% of all U.S. crude imports. Reuters reported that Chevron exported roughly 300,000 b/d from Venezuela to the U.S. this past January, a five-year high.
Last Thursday the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a “teapot” oil refinery and its CEO for purchasing and refining hundreds of millions of dollars’ worth of Iranian crude oil. This includes oil from vessels connected to the Houthis and the Iranian Ministry of Defense and Armed Forces Logistics (MODAFL). OFAC imposed sanctions on 19 entities and vessels responsible for shipping millions of barrels of Iranian oil, which are part of Iran’s “shadow fleet” of tankers supplying refineries like China’s Luqing Petrochemical. OFEC placed sanctions on China’s teapot refinery Shandong Shouguang Luqing Petrochemical in the Shandong Province, which has purchased millions of barrels of Iranian oil, valued at around half a billion dollars. Luqing Petrochemical received Iranian oil transported by shadow fleet vessels, some of which had already been sanctioned for their role in transporting petroleum linked to the Houthis. According to Kpler, February Iranian crude oil exports surpassed 1.8 million barrels per day. China’s Shanghai 300 Index closed lower by -0.33%.
OPEC+ issued a new schedule for seven members of the cartel, including Russia, Iraq and Kazakhstan to make further crude output cuts in order to meet agreed levels for the upcoming April OPEC+ production increases. The new plan outlines monthly cuts ranging from 189,000 barrels per day to 435,000 bpd. These cuts are scheduled to continue until June 2026. OPEC+ is set to increase output by 138,000 bpd in April.
Last Friday’s Baker Hughes weekly rig count showed the number of U.S. oil rigs decreased by -1, to a total of 486, year over year it is -23 rigs lower. U.S. gas rigs increased by +2, to a total 102. This was the first time U.S. energy companies added to rigs in three weeks.
The Dow, S&P and Nasdaq all suffered sell offs. The Dollar Index is trading at 104.66 (+0.46%).
Price Thoughts – As I wrote yesterday, the oil markets were up a nearly a buck at the open after the bigger than forecasted API survey, the EIA report later in this morning confirmed U.S. petroleum stocks and distillates had a bigger draw than analysts forecasts, which helped sustain the bullish momentum for the rest of today’s session for Brent and WTI until retreating slightly in the final hours. I suspect we’ll trade within a buck of the current prices for the remainder of the week, as all eyes will turn to next Wednesday’s reciprocal tariff announcements. Technically – Brent broke above and settled above it’s 100 day moving average today.
WTI Crude oil has broken above its $67 long-term support line, while Brent has sustained above its $70.00 level. Again the headline trading is leading the market moves, while the global supply/demand and weakening USD situation has set a ceiling and floor, in my opinion.
$65 has been a major support figure over the last year, with today’s settlement we may find ourselves with a new support at $67. To the upside there’s still resistance in near the upper $69 region into $70, above that $74.50. 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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