Recap: The May WTI contract on its last trading session as the spot contract, traded higher as the market waited to see what direction the Iran war would take. The market was focused on whether potential talks between the U.S. and Iran would result in an extension of the existing ceasefire or a final peace agreement. The crude market posted a low of $87.76 in overnight trading before it retraced its previous losses. It breached its previous high of $91.20 and continued to trend higher ahead of the May contract’s expiration at the close. The market rallied to a high of $94.45 before it gave up some of its gains ahead of the close. The May WTI contract went off the board up $2.52 at $92.13 and the June WTI contract settled up $2.25 at $89.67. The June Brent contract ended the session up $3.00 at $98.48. Meanwhile, the product markets also ended the session higher, with the heating oil contract settling up 18.79 cents at $3.7288 and the RB market settling up 9.3 cents at $3.2098.
Technical Analysis: The oil market on Wednesday will trend lower in light of the news that U.S. President Donald Trump said he was extending the ceasefire until an Iranian proposal is submitted and discussions are concluded. The market will look for further developments on Iran’s proposal and whether discussions begin despite the continuing blockade of the Strait of Hormuz. The crude market is seen finding support, basis the June WTI contract, at $85.50, $85.45, $78.97, $73.56, $72.69 and $71.95. Meanwhile, resistance is seen at $88.75, $89.60, $89.67, $89.72, $91.82, $92.66 and $96.93.
Fundamental News: On Tuesday, U.S. Energy Secretary, Chris Wright, said gasoline prices likely peaked last week. Retail gasoline prices have surged by more than $1/gallon since the war with Iran began in late February, reaching a high of $4.17/gallon on April 8th. According to the American Automobile Association, gasoline prices were averaging $4.02/gallon on Monday. That’s up from less than $3/gallon before the war with Iran. In an interview Sunday on CNN, the U.S. Energy Secretary said U.S. gasoline prices may remain at $3/gallon or higher until next year.
Vortexa reported today that crude oil stored on tankers that have been stationary for at least 7 days rose +11% w/w to 115.89 million bbl in the week ended April 17th.
The head of the International Energy Agency, Fatih Birol, said the conflict between Iran and the United States and Israel is creating the worst energy crisis ever faced by the world. Earlier in the month, he said that he viewed the current situation in global energy markets as worse than previous crises in 1973, 1979 and 2022 combined.
North Dakota’s crude output is set to increase in the coming months as increasing oil prices prompt operators to increase activity. Operators in the third largest oil-producing state are responding to higher oil prices, increasing output from existing wells while holding back on new drilling amid sharp price volatility tied to the Iran war. Nathan Anderson, director of the North Dakota Department of Mineral Resources, said there are currently 10 hydraulic fracturing crews operating in the state, with one operator in North Dakota set to pick up an additional rig and frac crew in July. Oil production in North Dakota increased by 4,000 bpd to 1.13 million bpd in February.
Citi said if disruptions to the Strait of Hormuz persist for another month, total losses could increase to about 1.3 billion barrels, with prices likely near $110/barrel in the second quarter of 2026.
Early Market Call – as of 8:25 AM EDT
WTI – May $90.02, down 20 cents
RBOB – May $3.2147, up 1 point
HO – May $3.8403, up 4.02 cents
