Market Volatility
The morning brings a downtrend in May WTI crude oil (CLK24) down -0.27 (-0.33%), while May RBOB gasoline (RBK24) faces a decline of -2.39 (-0.89%).
Today, both crude and gasoline prices experience a moderate dip, with gasoline reaching a 1-1/2 week low. The rise of the dollar today spells out bearish news for energy costs. Furthermore, the weekly EIA report pours a bucket of cold water on the market as both crude and gasoline inventories unexpectedly climb.
Global Turbulence and Support
Crude’s crack spread weakness paints a bearish picture, dropping to a 2-1/2 week low. This drop discourages refiners from delving into acquiring crude and processing it into gasoline and distillates.
However, recent Ukrainian drone attacks on Russian refineries provide support to crude prices, having damaged Russian oil processing facilities. Consequently, Russia’s fuel export capability has taken a hit. This event, coupled with the anticipation of OPEC+ maintaining crude production quotas during their upcoming meeting, keeps the oil market on its toes.
Extremes in Supply and Demand
A surge in Chinese crude oil demand underpins prices, with record data showcasing intense processing levels. On the other hand, compliance issues raise questions about OPEC+ commitments to production cuts, potentially muddling the supply picture.
On the geopolitical front, tensions in the Middle East fan the flames with the Israel-Hamas conflict and concerns over war spreading to Lebanon. Additionally, the US and UK airstrikes on Houthi rebels point to a volatile situation in Yemen, further disrupting global crude oil supplies.
Weekly EIA Report Insights
The latest EIA report reveals unexpected increases in crude and gasoline inventories, with a supporting decline in distillate inventories. US crude oil production remains below recent record highs, providing a nuanced look into the market.
Overall, while the oil market grapples with a mix of geopolitical tensions and supply-demand dynamics, investors brace themselves for the unpredictable shifts in the crude pricing rollercoaster.
More Crude Oil News from Barchart
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
