Recap: The oil market on Friday posted an outside trading day and ended the week down 2.45% after the market gave up its overnight gains as a brief outage on the Keystone pipeline failed to keep the market supported ahead of the weekend. The market traded higher in overnight trading after operations at TC Energy’s Keystone pipeline were partially suspended on Thursday. The market breached its previous high and rallied to a high of $79.99. However, the market failed to breach the $80 level as TC Energy confirmed the pipeline integrity and added that service had been temporarily suspended as a precautionary measure. The market erased its gains and sold off sharply. It extended its losses to over $1.30 as it sold off to a low of $77.56 by mid-day. The crude market later traded sideways during the remainder of the session. The April WTI contract settled down 92 cents or 1.17% at $78.01 and the May Brent contract settled down 88 cents or 1.06% at $82.08. The product markets ended the session in negative territory, with the heating oil market settling down 5.38 cents at $2.6409 and the RB market settling down 2.76 cents at $2.5272.
Technical Analysis: The crude market is still seen trending sideways within its recent trading range from $75.00 to $81.00. The market will look for further direction from any updates on a ceasefire in Gaza ahead of the start of the Muslim holy month of Ramadan. The market is seen finding support at its low of $77.56, $77.52, $77.27 and $77.17. Further support is seen at $76.17, $75.84, $75.52-$75.49 and $75.07. Resistance is however, seen at $79.99, $80.67, $80.85, $81.50, $82.00 and $82.61.
Fundamental News: TC Energy confirmed late Thursday afternoon its 622,000 b/d Keystone pipeline was safely operating after briefly suspending service as a precautionary measure.
The United Kingdom Maritime Trade Operations said a vessel travelling 50 nautical miles southeast of Yemen’s city of Aden reported two explosions in the sea ahead of it but the vessel and crew were reported as safe. It said that authorities were investigating the incident while security firm Ambrey said it was aware of an incident nearly 52 nautical miles south of Aden and was also investigating.
S&P Global Commodities at Sea data showed that as of March 6th Latin American refined product imports from the United States fell by about 6 million barrels from January to February, when volume totaled 46.2 million barrels. February import levels though were still some 5.9 million barrels above the same month a year ago.
Baker Hughes reported that U.S. energy firms this week cut the number of oil and natural gas rigs operating for the first time in three weeks. The oil and gas rig count fell by 7 to 622 in the week ending March 8th, the lowest level since February 16th. Baker Hughes said U.S. oil rigs fell by two on the week to 504, the lowest since February 23rd, while gas rigs fell by four to 115, the largest decline since November.
A survey by Platts estimates OPEC+ crude oil production was basically flat in February at 41.21 million b/d. This production level remains some 175,000 b/d above the group’s agreed upon quotas, with Iraq and Kazakhstan being the largest violators of their quotas.
IIR Energy said U.S. oil refiners are expected to shut in about 1.7 million bpd of capacity in the week ending March 8th, increasing available refining capacity by 201,000 bpd. Offline capacity is expected to fall to 842,000 bpd in the week ending March 15th, but is seen rising to 901,000 bpd in the week ending March 22nd.
Early Market Call - as of 8:20 AM EDT
WTI - April $77.70, down 30 cents
RBOB - April $2.5382, up 1.1 cents
HO - April $2.6178, down 2.31 cents
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