On Friday, April WTI crude oil closed at $9.89 (+12.21%) and April RBOB gasoline closed at $0.0757 (+2.83%), driven by ongoing geopolitical tensions in the Middle East which entered their seventh day without resolution and the closure of the Strait of Hormuz, a vital shipping lane for about 20% of the world’s oil supply. The conflict has caused major oil producers like Iraq and Saudi Arabia to curb production, leading to significant stockpiling of crude oil in storage facilities.
Qatar’s energy minister warned that the conflict could “bring down the economies of the world,” forecasting potential crude prices rising to $150 per barrel if Gulf energy exporters shut down production. Goldman Sachs estimated a real-time risk premium for crude oil at $18 per barrel due to the situation. Additionally, the U.S. Energy Information Administration reported that U.S. crude oil inventories as of February 27 were 2.7% below the five-year seasonal average, with production steady at 13.696 million barrels per day.
In other developments, OPEC+ plans to increase crude output by 206,000 barrels per day in April, while the number of U.S. oil rigs rose by 4 to 411, reflecting modest activity in the sector after a significant decline from a high of 627 rigs in December 2022.
