Recap: The oil market on Monday posted an outside trading day as the market weighed some supportive economic news from China and the diminished expectations for a quick agreement to end the Russia-Ukraine war against the expectations that OPEC+ will proceed with its oil output increase starting in April. The crude market retraced some of Friday’s losses and posted a high of $70.60 in overnight trading amid the news that China’s manufacturing activity in February increased at the fastest rate in three months. The market was also supported as the market awaits the outcome of efforts to end the war between Ukraine and Russia. The market later erased its gains and sold off to $69.15 by mid-morning as it held support at Friday’s low of $69.14. The market, however, breached its support and sold off sharply to a low of $67.89 on some headlines stating that OPEC+ has decided to proceed with a planned April output increase. The April WTI contract settled down $1.39 at $68.37 and the May Brent contract settled down $1.19 at $71.62. The product markets ended the session lower, with the heating oil market settling down 5.46 cents at $2.2604 and the RB market settling down 3.45 cents at $2.1878.
Technical Analysis: The crude market will likely retrace some of its losses and trade sideways as it weighs the OPEC+ news against lower expectations of a quick peace agreement between Ukraine and Russia. The market will look for further direction from the announcements regarding the tariffs that are expected to become effective on Tuesday. The oil market is seen finding support at its lows of $67.89, $67.75, $67.67, $67.18 followed by $66.62 and $66.41. Meanwhile, resistance is seen at its high of $70.60, $71.26, $71.70, $72.77, $72.88, $73.14, $73.33 and $74.06.
Fundamental News: Sources stated that OPEC+ has decided to proceed with a planned April oil output increase. The gradual unwinding of 2.2 million bpd of cuts begins in April with a monthly increase of 138,000 bpd.
U.S. President Donald Trump said there was no chance for Mexico or Canada to avert the 25% tariffs that he promised to impose starting Tuesday. Earlier, U.S. Commerce Secretary, Howard Lutnick, said President Donald Trump was still weighing pending tariffs on goods from Canada and Mexico before the midnight deadline and will announce his decision on Tuesday. He said the two neighboring countries had done a good job on tightening their borders with the United States but had to do more to stop the flow of the drug fentanyl.
A U.S. official said the United States is drawing up a plan to potentially give Russia sanctions relief as President Donald Trump seeks to restore ties with Moscow and stop the war in Ukraine. The White House has asked the State and Treasury departments to draft a list of sanctions that could be eased for U.S. officials to discuss with Russian representatives in the coming days as part of the administration’s broad talks with Russia on improving diplomatic and economic relations. According to the sources the sanctions offices are now drawing up a proposal for lifting sanctions on select entities and individuals, including some Russian oligarchs.
On Sunday, British Prime Minister Keir Starmer said European leaders had agreed to draw up a Ukraine peace plan to present to the United States. At a summit in London just two days after Ukraine’s President Volodymyr Zelenskiy clashed with U.S. President Donald Trump and cut short a visit to Washington, European leaders offered a strong show of support to the Ukrainian president and promised to do more to help his nation.
The startup of oil production from Equinor’s Arctic Johan Castberg field has been delayed again due to bad weather. Equinor had previously said it planned to start the field by the end of February, after postponing its startup from the end of 2024.
Early Market Call – as of 8:35 AM EDT
WTI – Apr $67.62, down 75 cents
RBOB – Apr $2.18512, down 26 points
HO – Apr $2.2723, up 1.19 cents
