Varied Morning for Crude Oil and Gasoline Prices
This morning, April WTI crude oil (CLJ24) is down -0.12 (-0.16%), while Apr RBOB gasoline (RBJ24) is up +0.50 (+0.18%). Gasoline edges up to a 5-3/4 month high, amid a mixed landscape of oil and gasoline prices. The dollar index rally to a 1-week high exerts a bearish pressure on energy prices. However, Ukrainian drone strikes on Russian refineries and Thursday’s IEA report on supply deficit provide some support.
US Economic Indicators Impact on Crude Prices
US economic data today presents a mixed bag for energy demand and crude prices. The Mar Empire manufacturing survey and the Mar consumer sentiment index both show weaker numbers, while Feb manufacturing production records an impressive rise. These factors create a nuanced economic backdrop influencing the oil market.
Global Projections and US Production Forecasts
The IEA predicts global oil markets will face a deficit if current OPEC+ production cuts are maintained. However, the balance can shift to a surplus if production increases. Such projections set the stage for OPEC+’s crucial decision on production levels in June. In contrast, the EIA’s outlook on US oil production signals potential challenges ahead with rising production figures that could offset OPEC+ cuts.
OPEC’s Role in the Oil Market
OPEC maintains its forecasts for oil supply and demand, with world oil consumption projected to reach a record high in 2024. However, challenges persist as OPEC+ struggles to adhere to agreed-upon production cuts. Overproduction by certain members like Iraq further complicates the global oil market dynamics.
Geopolitical Unrest and Shipping Disruptions
The ongoing conflict between Israel and Hamas, along with potential spillovers to Lebanon, adds a layer of uncertainty to oil prices. Additionally, attacks on commercial shipping in the Red Sea create disruptions, forcing shippers to seek alternative routes, ultimately impacting global crude oil supplies.
Storage Data and Rig Activity
Falling crude oil inventories in floating storage and the latest EIA report on US crude oil production and inventories provide a snapshot of the market’s current state. The decline in active US oil rigs, influenced by various factors, hints at evolving dynamics within the industry.
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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 are 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.
