However, the tailwinds for crude oil now vastly outnumber the headwinds, so prices will likely continue upwards in the coming days, especially in light of the escalation in Israel following the move of the US embassy from Tel Aviv to Jerusalem that ignited protests in Gaza, prompting an immediate military response from the IDF. Yesterday, the commodity started the day on a weaker note, but ended the day higher. The production growth may be far from over, contributing to USA crude's discount to Brent, analysts said. Total volume traded on Tuesday was in line with the 100-day average. The previous round of sanctions cut Iran's output in half; it is unclear how much will be cut this time. Another warning sign for the commodity is that both WTI and Brent are now looking overbought on a daily chart. In addition, there are downside risks to Iranian crude oil exports.
Turning to the latest developments, OPEC data showed that crude oil inventories in developed (OECD) countries continued to fall. In March the cartel actually managed to withhold about 2.4 million barrels per day.
Essentially, there is the Oil Price Fundamental Daily Forecast - OPEC Says Global Supply Glut Virtually Eliminatedthreat of increased USA production.
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Three members of the Organization of Petroleum Exporting Countries - Saudi Arabia, Kuwait and the United Arab Emirates - together have enough capacity to act as a cushion the U.A.E. energy minister said. Our short-term and medium-term outlook on crude remains bullish. The global benchmark crude traded at a US$6.34 premium to July WTI.
West Texas Intermediate (WTI) was up to $71.09 just after the memo went public and Brent Sea crude was over $78.
Yet, the biggest story in oil markets this year may well take place far from the much-publicized tensions in the Middle East - namely China's ever-growing oil demand. As the result of the ongoing economic horror of Venezuela's economy under the Bolivarian leadership of Nicolas Maduro, oil production in that country has fallen from 2.4 million to almost 1.4 million barrels per day. The weekly report showed a 0.3 percent dip in domestic crude inventories, and a near 1-percent decline in gasoline supplies.
The company's revenues increased "on the back of higher crude oil prices and optimization in sales channels despite the remaining constraints in production within the OPEC+ Agreement", it said on a statement issued on Monday.