Recap: Oil futures fell just over 2.5% in reaction to the 5 million barrel increase in U.S. crude oil inventories. Stockpiles were bolstered by a 1.1 million barrel increase in imports and rising U.S. production. May WTI slipped to $47 a barrel, marking a new 4-month low, while Brent for May delivery bottomed at $49.71, its lowest level in 4-months.

By early afternoon, prices staged a comeback, with both blends rising to new session highs on technical short covering and statements by the Saudi oil minister alluding to the possibility of Iran making cuts and an extension of the current output agreement. May WTI worked its way back over $48 a barrel, to settle at $48.04, down 20 cents, or 0.41%, while May Brent settled at $50.64 a barrel, down 32 cents, or 0.63%

April RBOB fell less than half a cent, or 0.2%, to $1.602 a gallon and April heating oil lost under a cent, or 0.4%, to $1.497 a gallon.

Fundamental NewsWhile it is unlikely that Iran would agree to cut its production, sources reported that Saudi Arabia may insist on Iran cutting its output in order to continue OPEC's output cut agreement.

Russia has not ruled out extending an OPEC and non-OPEC output cut agreement, with the final decision dependent on Saudi Arabia, according to Russia's envoy to international organizations, Vladimir Voronkov.

Goldman Sachs reported that OPEC cuts are expected to impact Gulf Coast supply in 35-45 days.  It said the cut will also have an unintended consequence of spurring shale activity, which along with a delayed delivery of the 2011-2013 capex boom, may lead to record non-OPEC output growth in 2018.

A board member at Libya's National Oil Corp, Jadalla Alaokali, said the country's oil production increased to 699,000 bpd.  He also stated that a tanker is set to load at the Es Sider port on March 26th.  Separately, Libya's NOC said the country plans to raise its output at its Sharara field by 70,000 bpd in weeks.  The fields is currently producing 221,000 bpd.  

Oman's crude oil production fell to about 883,000 bpd in January from 884,000 in December and from 923,000 bpd in October, the benchmark month from which production cuts are calculated under the OPEC agreement.

Angola exported 1.685 million bpd of crude in January, up 7% on the month.  The figure is just above its production quota of 1.673 million bpd allocated under OPEC's output cut agreement.

Genscape reported that crude storage in the ARA region increased by 7.3% or 4.06 million barrels to 59.48 million barrels in the week ending March 17th.

Kinder Morgan Texas Pipeline LLC said the Gulf Coat Express Pipeline will be in service in the second half of 2019, subject to shipper commitment.  Separately, Kinder Morgan said the open season for the TransMountain expansion was concluded.  It said firm shippers have made 15 and 20 year commitments of 707,500 bpd or about 80% on the expanded pipeline.  It said the other 20% of capacity is reserved for spot volumes as required by the National Energy Board.

IIR reported that US oil refiners are expected to shut in 1.357 million bpd of capacity in the week ending March 24th, raising available refining capacity by 385,000 bpd from the previous week.  IIR also expects offline capacity to fall to 795,000 bpd in the week ending March 31st.  

Early Market Call - as of 9:00 AM EDT

WTI - Apr $47.85, down 20 cents

RBOB - Apr $1.5825, down 1.92 cents

HO - Apr $1.4956, down 10 points 

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