The EIA reported a 13.8 million barrel build in U.S. crude oil inventories

Recap: Oil futures opened Wednesday’s session trading unchanged, but by daybreak on the East Coast, April WTI was trading just below $65 a barrel. This strong technical number held up, as prices retreated after the EIA reported a 13.8 million barrel build in U.S. crude oil inventories. Inventories continue to swell, as the nation’s oil industry continues to suffer from the effects of the winter storm that stalled refining and forced production closures in Texas. With producers appearing to come back online faster than refiners, inventories are building. However, weakness in the dollar and an upbeat forecast for a global economic recovery pushed prices off session lows, bringing oil prices above unchanged. April WTI added 43 cents, or 0.67%, to settle at $64.44, while May Brent closed up 38 cents, or 0.56%, to settle at $67.90 a barrel. April RBOB added .0293 cents to settle at $2.0795 a gallon, while April heating oil closed up .0100 at $1.9173 a gallon.

Technical Analysis:  Wednesday’s choppy session saw April WTI bounce off of the 10-day moving average and hold below resistance at $65. Since experiencing a closing reversal top on Monday, it has had difficulty climbing back $65 level. While the main trend is still to the upside, momentum has been trending lower. A break below the 10-day moving average, currently set at $62.98, will shift the minor trend to the downside, with the possibility of reaching $60. To the upside, should we get above $65, we would look for a push at the reversal top up at $67.98, with trades above this level accelerating the upside momentum

Fundamental News:  Saudi Arabia's Foreign Minister, Prince Faisal bin Farhan Al Saud, said the country would take deterrent action to protect its oil facilities, following attacks by Yemen's Iran-aligned Houthi movement on energy sites.  He said Saudi Arabia would guarantee global energy security. He also said in a news conference with Russian Foreign Minister Sergei Lavrov in Riyadh, that the kingdom would continue to cooperate with Russia in the OPEC+ framework.  Meanwhile, Russian’s Foreign Minister, Sergei Lavrov, said that OPEC+ oil producers would try to ensure there are no sharp oil price swings and that the current price more or less reflected the balance between producers and consumers.  He also said a recent attack on Saudi oil facilities was unacceptable. He also said that Russia and Saudi Arabia planned to develop cooperation within OPEC+.

According to Petro-Logistics and Kpler, Saudi Arabia has yet to demonstrate a cut in supply as large as its promised voluntary production cut, a view dismissed by Saudi Arabia which says it is reliable.  Saudi Arabia pledged to cut production voluntarily by 1 million barrels per day in February and March, as part of a deal by OPEC and allies. Last week, Saudi Arabia said it would extend the voluntary cut into April. However, oil flows from the country suggest a smaller decline in February. Daniel Gerber, chief executive of Petro-Logistics said "according to Petro-Logistics' assessment and following discussions with sources and contacts in the market, our estimate for Saudi supply in February is a cut of around 600,000 bpd month on month".  Kpler also sees a smaller reduction, saying in a report that Saudi oil exports fell by 194,000 bpd in February while domestic inventories declined by 119,000 bpd, although it noted lower shipments towards the end of the month. 

Russian Deputy Prime Minister, Alexander Novak, said there was a risk of non-OPEC+ oil producers increasing output due to higher oil prices and that oil market demand was gradually being restored. 

IIR Energy reported that U.S. oil refiners are expected to have 3.9 million  bpd of capacity offline in the week ending March 12th, increasing available refining capacity by 1.4 million bpd from the previous week. 

Early Market Call - as of 8:20 AM EDT

WTI - Apr $65.45, up $1.01

RBOB - Apr $2.1047, up 2.52 cents

HO - Apr $1.9322, up 1.49 cents