Crude oil inventories rose by a record 15.2 million barrels

Recap: Oil prices pared early gains of more than 10%, with Brent briefly trading in negative territory after the EIA released an overwhelmingly bearish U.S. inventory report. Crude oil inventories rose by a record 15.2 million barrels, even as production was cut by 600,000 barrels per day, to 12.4 million bpd. Prices did strengthen ahead of settlement on hopes that OPEC+ would reach an agreement in regard to production cuts. However, the agreement seems to hinge on the U.S. taking part in the cuts, which adds an element of uncertainty an agreement will be reached as Washington has been signaling a clear unwillingness to impose any production cuts on U.S. oil companies. Trading was relatively quiet ahead of the meeting. WTI for May delivery rose $1.46, or 6.2, to settle at $25.09 a barrel, while June Brent settled at $34.84 a barrel, up 97 cents, or 3.04%.prices for petroleum products ended on a mixed note with May RBOB finished up 4.6% at 67.80 cents a gallon, but May heating oil settled down 1.6% at $1.0107 a gallon. 

Technical Analysis: WTI continues to find support down around the $23.50 level, while $25 appears to be serving as a pivotal area. Resistance is set at $26.30 and above that at $27.60. Support is seen at $23.65 and $19.27

Fundamental News: The world's top oil producers Saudi Arabia, Russia and the United States still seemed at odds on Wednesday before this week's meetings.  Saudi Arabia and Russia, have signaled they could agree deep cuts to crude output but only if the United States and others outside a group known as OPEC+ joined in.  However, the U.S. Department of Energy said on Tuesday that U.S. output was already falling without government action, echoing views from the White House that it would not intervene, even as global demand for crude has plunged by as much as 30%. 

The Kremlin declined to spell out Russia's position ahead of a meeting of OPEC+ oil-producing countries on Thursday, refusing to say whether it will insist on the United States committing to oil output cuts. Later, an unnamed Energy Ministry official said Russia is ready to cut its oil output by 1.6 million bpd. Russia’s oil output stands at about 11.29 million bpd.

Iran’s Oil Minister, Bijan Zanganeh, said Iran does not agree with holding any OPEC+ meeting in the absence of a clear proposal and expected outcome from such talks for the oil market. He said that organizing a meeting "in the absence of any clear and consensual outcome (to) convey to the market" would be a message of failure even before it starts, which "may aggravate the current low price environment even further".  He said that issues like the size of a cut and duration, how much would countries like the United States and Canada cut, what is the baseline for the cuts for each country and how would the reductions be distributed, should be discussed first before holding a meeting.

Republican U.S. senators, who have introduced a bill that would remove U.S. defense systems and troops in Saudi Arabia unless it cuts oil output, will hold a call with the kingdom's officials on Saturday. Senators Kevin Cramer and Dan Sullivan will hold a call with the officials two days after a scheduled OPEC+ meeting in which Saudi Arabia and Russia are expected to agree an output cut. The two countries have been pumping oil flat out beginning last month in a race for market share. The senators' bill would remove U.S. troops, Patriot missiles and THAAD defense systems from the kingdom and put them elsewhere in the Middle East unless it cuts oil output. A source, who spoke on condition of anonymity because of the sensitivity of the talks, said stabilization of global oil markets would be discussed but had no more details.

Early Market Call – as of 8:30 AM EDT

WTI – May $25.94, up 85 cents

RBOB – May $.6939, up 1.57 cents

HO – May $1.0078, down 29 points

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