Price Movement and Market Updates
May WTI crude oil (CLK24) on Wednesday closed up +0.28 (+0.33%), while May RBOB gasoline (RBK24) closed up +0.20 (+0.07%). The surge in crude and gasoline prices saw crude hitting a 5-1/4 month high and gasoline reaching a 7-month high. This uptick was fueled by a weaker dollar, offering a supportive backdrop for energy prices.
Decision Impact: OPEC+ and Production Cuts
OPEC+ made a resolute choice at their recent monthly meeting, opting to maintain current crude output cuts until the end of June. This decision, effectively keeping around 2 million bpd of production cuts in place, contributed to a bullish sentiment in the oil market.
Geopolitical Factors and Oil Prices
Amidst the ongoing Israel-Hamas conflict, concerns about escalating tensions have added support to oil prices. The specter of further involvement by Iran in the region, following a recent airstrike by Israel in Syria, has further heightened market anxieties.
Global Disruptions and Price Premium
The recent Ukrainian drone attacks on Russian refineries have dealt a blow to Russian oil processing capabilities, restricting fuel exports. This disruption, coupled with unforeseen refinery closures, has injected a $4 risk premium per barrel into oil prices. However, despite the refinery damage, Russian fuel exports remained robust.
Market Outlook and Demand Projections
Positive news emerged from China, with record-high crude oil processing figures indicating robust demand. The Chinese market’s resilience, coupled with soaring fuel consumption levels compared to pre-pandemic levels, bodes well for oil prices.
Global Unrest and Supply Chain Disruptions
Heightened tensions in the Middle East, with conflicts spilling over to Lebanon and Yemen, have contributed to market unease. Disruptions to commercial shipping in the Red Sea, attributed to Houthi rebel attacks, have further complicated global crude oil supplies, necessitating diversionary routes.
US Inventory Report and Baker Hughes Data
The latest EIA report presented a mixed picture, with unexpected fluctuations in gasoline and distillate stockpiles. US crude production remained steady, slightly below peak levels, while active oil rig numbers showed a marginal decline from previous highs.
For additional Crude Oil News from Barchart, consult directly from the source.
Please note that the author holds no positions in the securities discussed in this article. The information provided is for informational purposes only. Refer to the Barchart Disclosure Policy for further details.
The viewpoints expressed are solely those of the author and may not necessarily align with Nasdaq, Inc.’s opinions.
