Recap: Oil futures jumped as much as 9% on Thursday, following several days of down moves, as the market rebounded from renewed focus on supply shortages in coming weeks due to sanctions on Russia. Oil markets in recent weeks have experienced their most volatile period since mid-2020. After sliding as buyers cashed in on the run-up, prices have resumed their upward trend on expectations that shortages will soon squeeze the energy market. Brent for May delivery added $8.62, or 8.79%, to settle at $106.64 a barrel, while April WTI rose $7.94, or 8.35% to $102.98 a barrel. Petroleum products were also higher, with April RBOB adding .2291 cents to settle at $3.2166 a gallon, while April heating oil tacked on .3873 cents, to finish the session at $3.4874 a gallon.
Technical Analysis: WTI bounced off of the 50-day moving average three days in a row and finished the session wedged between this average and the 10-day moving average. With Thursday’s settlement above $100, we would look for a continuation to the upside, with $104.50 being the nearest upside objective, with resistance above this level coming in at $106.53. To the downside, support is seen at $100, and below that at $97.14
Fundamental News: Morgan Stanley said its new third quarter Brent price forecast is $120/barrel, up from a previous estimate of $100/barrel. Its Brent price forecast for the fourth quarter was raised to $110/barrel from a previous forecast of $100/barrel. It also raised its 2023 crude price forecast to $100/barrel from a previous estimate of $95/barrel. It raised the price amid as it cut its production forecast for Russia by 1 million bpd and global demand forecast by 600,000 bpd to 3.4 million bpd. Morgan Stanley forecast 1 million bpd growth in supply from Iran in the second half of 2022 on a potential nuclear agreement that would release Iranian crude into the market.
Western officials said that Ukraine and Russia are taking peace talks seriously but a very big gap remains between the two sides.
The Kremlin said that Russia was putting "colossal" energy into talks on a possible peace deal with Ukraine that could swiftly stop the Russian military operation there.
Japan’s Prime Minister, Fumio Kishida, said he discussed a possible increase in crude oil output with Saudi Arabia's Crown Prince Mohammed bin Salman. He told reporters after his telephone call with the Crown Prince that he also delivered his high expectations for Saudi Arabia's leadership to stabilize the crude oil market and agreed to cooperate on the Ukraine crisis.
The EPA reported that the U.S. generated fewer renewable fuel blending credits in February compared with the previous month. It stated that 1.07 billion ethanol (D6) blending credits were generated in February, down from 1.21 billion in January, while 395 million biodiesel (D4) blending credits were generated in February, up from 355 million in January.
Early Market Call – as of 8:15 AM EDT
WTI – Apr $102.33, down 68 cents
RBOB – Apr $3.1637, down 5.11 cents
HO – Apr $3.4711, down 1.75 cents
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