Recap: The crude market on Friday traded higher as traders remained concerned over potential supply disruptions after talks between the U.S. and Iran over Tehran’s nuclear program ended with no breakthrough. The U.S. and Iran plan to resume negotiations with technical level discussions scheduled next week in Vienna. The crude market posted a low of $64.85 before it bounced off that level and extended its gains to over $2.60 and posted a high of $67.83 by mid-morning. The market later erased some of its gains and settled in a sideways trading range during the remainder of the session. The April WTI contract settled up $1.81 at $67.02 and the April Brent contract settled up $1.73 at $72.48. The product markets ended the session higher ahead of expiration of the April contracts, with the April heating oil market going off the board up 5.84 cents at $2.6709 and the April RB contract going off the board up 4.56 cents at $2.0779.
Technical Analysis: While there is hope of a possible peaceful resolution, a military conflict remains a possibility amid the U.S. military buildup in the Middle East and U.S. President Donald Trump’s warning on Friday that sometimes you have to use military force. The oil market will remain on alert for any potential supply disruptions. The market will remain headline driven ahead of a scheduled visit by U.S. Secretary of State, Marco Rubio, to Israel on Monday through Tuesday and ahead of the technical discussions between the U.S. and Iran over its nuclear program. The crude market is seen finding resistance at $67.83 followed by $69.58, $70.41 and $70.51. Meanwhile, support is seen at $65.11, $64.85, $64.27, $63.60, $63.43, $62.04 and $61.76.
Fundamental News: U.S. President Donald Trump said he was not happy with Iran and wants to make a deal with Tehran but warned that “sometimes you have to” use military force.
The State Department said U.S. Secretary of State Marco Rubio will travel to Israel next week, where he will discuss Iran. The State Department said he will travel to Israel March 2nd-3rd. He is also set to discuss other regional priorities, including Lebanon and U.S. President Donald Trump’s Gaza peace plan.
The U.S. Embassy in Jerusalem said the U.S. will permit non-emergency government personnel and family members to leave Israel over safety risks, amid growing concerns about the risk of a military conflict with Iran.
Baker Hughes said U.S. energy firms this week cut the number of oil and natural gas rigs operating for the first time in six weeks. The oil and gas rig count fell by one to 550 in the week ending February 27th, the lowest level since late January. Baker Hughes said oil rigs fell by two to 407 this week, their lowest level since December, while gas rigs increased by one to 134, their highest level since July 2023.
Bloomberg News reported that Abu Dhabi is set to export more of its flagship Murban crude in April, adding to increased oil supplies from countries across the key producing region. Government-owned Abu Dhabi National Oil Co. has offered additional volumes to partners in the United Arab Emirates’ onshore concession. Meanwhile, Saudi Arabia is also increasing its oil production and exports as part of its contingency plan in case any U.S. strike on Iran disrupts supplies from the Middle East. The rise in production from Saudi Arabia and the United Arab Emirates comes ahead of Sunday’s OPEC+ meeting. The group is likely to consider raising oil output by 137,000 bpd for April after suspending production increases in the first quarter.
IIR Energy said U.S. oil refiners are expected to shut in about 1.34 million bpd of capacity in the week ending February 27th, cutting available refining capacity by 27,000 bpd. Offline capacity is expected to fall to 1.04 million bpd in the week ending March 6th.
Early Market Call – as of 8:40 AM EDT
WTI – Apr $72.44, up $5.15
RBOB – Apr $2.4080, up 10.69 cents HO – Apr $2.9820, up 39.28 cents
