Recap: Oil prices were mixed on Thursday, with Brent retreating from four month highs, while WTI posted a fresh four month high. May Brent crude hit a 2019 peak of $68.14 per barrel before falling to $67.15 a barrel by 1:34 p.m. EST (1617 GMT), down 40 cents from Wednesday’s close. WTI climbed 38 cents to $58.64 a barrel during the same time period. While Brent remained on the downside, WTI held on to gains. May Brent fell 32 cents, or 0.47 percent, to settle at $67.23 a barrel. April WTI settled at $58.61 a barrel, up 35 cents, or 0.60 percent. WTI continued to gather its strength from Wednesday’s EIA report, which showed a drop in U.S. crude production, which fell 100,000 barrels to 1.2 million, while net imports remained subdued. OPEC and its partner’s adherence to production cuts, along with U.S. sanctions against Venezuela have also contributed to market strength. April RBOB fell 0.4% to $1.850 a gallon, after a settlement Wednesday at its highest since October. April heating oil lost 0.4% to $1.985 a gallon.
Technical Analysis: April WTI ascended deeper into the upward channel as seen on a daily spot continuation chart. At this time, moving oscillators are calling for higher prices, and therefore, we would look for a move toward the November high of $58.90. Above this level, additional resistance is set at $59.50. Support is set at $57.50 and $56.57.
Fundamental News: In a monthly report, OPEC cut its forecast of global demand for its crude this year as non-OPEC producers increase their production. OPEC said 2019 demand for its crude will average 30.46 million bpd, 130,000 bpd less than forecast last month and below what it is currently producing. It raised its 2019 non-OPEC supply growth forecast by 60,000 bpd to 2.24 million bpd. OPEC said its oil output fell by 221,000 bpd on the month to 30.55 million bpd in February. That amounts to 105% compliance with pledged cuts. It also reported that OECD oil inventories in January increased by 22.1 million barrels and stood 19.1 million barrels above the 5-year average.
Genscape reported that crude oil stocks held in Cushing, Oklahoma in the week ending Tuesday, March 12th increased by 362,524 barrels on the week and by 361,588 barrels from Friday, March 8th to 49,650,027 barrels.
According to shipping fixture lists and S&P Global Platts trade flow software, cFlow, gasoline deliveries to Canada and the US from Northwest Europe in March are expected to total 659,000 metric tons, surpassing the total deliveries for February. Six ships over the past seven days were each carrying 37,000 metric tons of gasoline into the US or Canada. Four ships are set to deliver into the East Coast, one is headed for the Gulf Coast and one is set for discharge in Canada.
Iraq’s Oil Minister, Thamer Ghadhban, said the country has cut its oil exports average to 3.5 million bpd in compliance with an ongoing production cut agreement between OPEC and non-OPEC producers. He said the OPEC meeting in April will assess member states’ compliance with agreed production cuts and whether to extend the cuts until the end of the year. Iraq exports an average of 3.6 million bpd in January-February, and 3.7 million bpd in December.
Two sources stated that the US aims to cut Iran’s crude exports by about 20% to below 1 million bpd from May, likely reining in waivers for Iran’s remaining customers.
The US Environmental Protection Agency granted five of the seven outstanding small refinery hardship waivers requested for the 2017 compliance year under the Renewable Fuel Standard, bringing the year’s total approvals to 37. The agency also received two more petitions for the hardship waivers for compliance year 2018, bringing the total number of applications filed to 39.
Early Market Call - as of 9:10 AM EDT
WTI - Apr $57.80, down 84 cents
RBOB - Apr $1.8228, down 2.67 cents
HO - Apr $1.9488, down 3.58 cents
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