Recap: The crude oil market on Thursday posted an outside trading day as the market weighed the news of a U.S. federal court’s ruling against President Donald Trump’s tariffs and against the expectations that OPEC+ will unwind another 411,000 bpd of production cuts in July at its meeting on Saturday. The oil market rallied higher in overnight trading and posted a high of $63.07 after a U.S. trade court on Wednesday ruled that President Trump overstepped his authority by imposing across-the-board duties on imports from U.S. trading partners. The market, however, erased its gains as it remained focused on the expectations that OPEC+ will increase its output at its upcoming meeting. It breached its support line at $61.08 and sold off to a low of $60.55 by mid-morning after the International Energy Agency’s director warned of weaker demand in China. The market later retraced some of its losses but remained in negative territory as a U.S. appeals court reinstated the Trump administration’s tariffs. The July WTI contract settled down 90 cents at $60.94 and the July Brent contract settled down 75 cents at $64.15. The product markets ended the session lower, with the heating oil market settling down 5.53 cents at $2.0328 and the RB market settling down 2.98 cents at $2.0594.
Technical Analysis: The oil market on Friday will remain in its sideways trading range as traders reassess the U.S. court rulings on the Trump administration’s tariffs. The market is also awaiting OPEC+’s decision on its output policy on Saturday. OPEC+ producers are expected to accelerate its unwinding of its output cuts, with another increase of 411,000 bpd in July. The market is also awaiting for further developments on the U.S.-Iran nuclear talks. The crude market is seen finding support at its low of $60.55, $60.26, $60.02, $59.64, $59.49, $58.49 and $57.37. Resistance is seen at $61.36, its high of $63.07, $64.19 and $65.82.
Fundamental News: A federal appeals court on Thursday reinstated President Donald Trump’s tariffs, a day after a U.S. trade court found the president had exceeded his authority by imposing across-the-board duties on imports from U.S. trading partners. An order from the U.S. Court of Appeals for the Federal Circuit in Washington provided no opinion or reasoning but directed the plaintiffs in the case to respond by June 5th and the administration by June 9th.
Interfax reported Thursday that Kazakhstan said OPEC+ will raise crude production levels at its meeting Saturday. Earlier, Kazakhstan’s Deputy Energy Minister, Alibek Zhamauov, said Kazakhstan notified OPEC that it does not intend to cut its oil production. He said OPEC+ member countries will decide to increase July oil output when they meet on May 31st, but the size of the potential hike remains unclear. On Wednesday, the OPEC+ group agreed to leave its output policy unchanged. A separate meeting on Saturday of eight OPEC+ countries is expected to decide on an increase in oil output for July.
Kazakhstan’s Energy Minister, Erlan Akkenzhenov, said that an oil price above $70-$75/barrel is likely to be suitable for all countries.
Kremlin spokesman, Dmitry Peskov, said Russia’s President Vladimir Putin currently has no plans to speak to U.S. President Donald Trump. Separately, the Kremlin said it was still awaiting a response from Ukraine on Russia’s proposal to hold the next round of peace talks in Istanbul on June 2nd to begin discussions on draft memorandums for a peace accord. Previous talks on May 16th failed to reach an agreement on a ceasefire, which Russia has said is impossible to achieve before certain conditions are met.
Early Market Call – as of 8:25 AM EDT
WTI – Jul $60.41, down 51 cents
RBOB – Jun $2.0460, down 91 points
HO – Jun $2.0349, down 99 points
