Recap: Oil futures fell in early trading on Friday after European Union countries failed to agree on a ban on imports of Russian crude oil and as exports from Kazakhstan’s CPC crude terminal partially resumed. Once word broke of a missile strike and fire at Saudi Arabia’s state run oil company Aramco’s refinery, oil futures turned to the upside. The attack comes just five days after the Houthi group fired missiles and drones at Saudi energy and water desalination facilities, causing a temporary drop in output at a refinery but no casualties. Both benchmarks were heading for their first weekly gains in three weeks. Brent was on track for an 11% weekly jump and WTI for a rise of over 8%. May WTI $1.56, or 1.39%, to settle at $113.90 a barrel, up 10.49 on the week, snapping a two week losing streak. May Brent settled at $120.65 a barrel, a gain of $1.62, or 1.36%, up 11.79 on the week. Petroleum products closed mixed, with April RBOB settling at $3.4700 a gallon, up 8.03 cents, or 2.37%, for a weekly gain of 7.145. Heating oil for April delivery closed at $41.1146 a gallon, down 3.88 cents, or 0.93%, up 14.35% on the week.
Technical Analysis: Oil markets ended the week showing signs of support, as traders took advantage of buying on dips. The fact that market participants are still willing to buy this market on such dips leads us to believe that we will see higher prices coming into the week. A break above Thursday high of $116.64 opens up the opportunity for a run at $120. A push below Friday’s low of $108.68 could gather enough momentum to push this market tower $104.59, the 38% retracement provided by the range of $130.50 and $62.43.
Fundamental News: The Caspian Pipeline Consortium terminal partially resumed oil loadings on Friday with the Seavoyager vessel loading from single mooring point 1 at the Black Sea port of Yuzhnaya Ozereyevka. Seavoyager, which can carry 135,000 tons of CPC Blend, started loading oil from SPM-1 late on Thursday.
A Saudi Aramco storage facility has been hit by an attack in Jeddah. Saudi state media had reported several drone and rocket attacks by Yemen’s Houthi movement and a large plume of black smoke was seen rising in Jeddah. Houthi military spokesman Yahya Sarea said that Yemen's Houthis had attacked Saudi Aramco's facilities in the port city of Jeddah with missiles and the Ras Tanura and Rabigh refineries with drones. He added that the attack also targeted vital facilities in the Saudi capital Riyadh.
White House National Security Adviser, Jake Sullivan, said the United States is still pursuing talks on Iran's nuclear program but will work with allies to increase pressure on Iran if diplomacy fails. The talks were close to an agreement until Russia made last-minute demands of the United States, insisting that sanctions imposed on Moscow over its invasion of Ukraine would not hurt its trade with Iran. On Thursday, Iran’s Foreign Minister, Hossein Amirabdollahian, said that the vital issue of sanctions relief for Iran was not yet fully resolved.
IIR Energy reported that U.S. oil refiners are expected to shut in 1.015 million bpd of capacity in the week ending March 25th, increasing available refining capacity by 2,000 bpd from the previous week.
Baker Hughes reported that U.S. energy firms added oil and natural gas rigs for a record 20th consecutive month, with oil rigs alone increasing by seven this week after the United States urged producers to increase output. It said the oil and gas rig count increased by seven to 670 in the week to March 25th, its highest since March 2020. U.S. oil rigs increased by 7 to 531 this week, their highest since April 2020, while the number of gas rigs were unchanged at 137.
Early Market Call - as of 8:45 AM EDT
WTI - May $108.14, down $5.77
RBOB - Apr $3.3303, down 13.6 cents
HO - Apr $3.9172 down 20.03 cents
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