**Crude Oil Prices Experience Volatility Amid Middle East Tensions**
On Friday, May WTI crude oil (CLK26) closed at $96.20, down 1.30 (-1.33%), while May RBOB gasoline (RBK26) rose by $0.0366 (+1.22%). The trade was influenced by heavy liquidation of crude oil futures ahead of peace negotiations between the US and Iran scheduled for Saturday. The market initially reacted positively to a weaker dollar and ongoing blockages in the Strait of Hormuz, which have significantly disrupted oil flows and reduced global supplies.
The negotiations come as Persian Gulf oil producers have had to cut production by around 6%, with the Strait of Hormuz, a crucial passage for 20% of the world’s oil, still obstructed by Iranian restrictions. OPEC+ announced plans to increase output by 206,000 barrels per day (bpd) in May, though these efforts are complicated by the ongoing conflict and a significant drop in OPEC’s production to its lowest level in 35 years, totaling 22.05 million bpd.
Additionally, Vortexa data indicates that approximately 290 million barrels of Russian and Iranian crude are currently in floating storage, primarily due to sanctions and blockades, marking a 40% increase from the previous year. US crude oil inventories as of April 3 were notably above seasonal averages, with production slightly declining to 13.596 million bpd.
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