Recap: The oil market on Friday traded lower and remained within its recent trading range ahead of the long Presidents’ Day holiday. The market traded lower on the possibility of an end to the Russia-Ukraine war following talks earlier in the week between President Donald Trump and Russia’s President Vladimir Putin on starting negotiations, while the market’s losses were limited by a delay in the U.S. imposing reciprocal trade tariffs globally. The market traded higher in overnight trading on expectations that U.S. plans for global reciprocal tariffs would not come into effect before April. On Thursday, President Trump ordered commerce and economic officials to study reciprocal tariffs against countries that place tariffs on U.S. goods and to return their recommendations by April 1st. The crude market traded to a high of $72.02 early in the morning. However, the market gave up its gains and sold off to a low of $70.53 on prospects for a peace deal between Russia and Ukraine that could ease global supply disruptions by ending sanctions against Russia. The March WTI contract, which held support at its previous low, settled down 55 cents at $70.74 and the April Brent contract settled down 28 cents at $74.74. The product markets ended in mixed territory, with the heating oil market settling up 1.31 cents at $2.4618 and the RB market settling down 2.08 cents at $2.0899.
Technical Analysis: The crude oil market next week will remain driven by the latest headlines regarding the possibility of a Russia-Ukraine peace deal as well further policy announcements by the Trump administration. The market is seen finding support at its low of $70.66, $70.22, $70.00 $69.75, $69.06 and $68.94. Meanwhile, resistance is seen at $72.02, $73.22, $73.68, $73.73, $74.81, $75.18-$75.21 and $75.89.
Fundamental News: On Thursday, The Wall Street Journal reported that U.S. Vice President JD Vance said the U.S. could hit Moscow with sanctions and potential military action if Russian President Vladimir Putin does not agree to a peace deal with Ukraine that guarantees Kyiv’s long-term independence. He said “There are economic tools of leverage, there are of course military tools of leverage” the U.S. could use against Putin. Earlier on Thursday, President Donald Trump said that Ukraine would be involved in peace talks with Russia. He said that Ukraine would have a seat at the table during any peace negotiations with Russia over ending the war. Meanwhile, Ukraine said it would be premature to speak with Moscow at a security conference on Friday.
On Friday, U.S. Vice President JD Vance said he plans to discuss the Ukraine-Russia conflict at the Munich Security Conference and how to bring it to a negotiated settlement. He added that the United States wanted to make sure that NATO was built for the future. Meanwhile, Ukrainian President Volodymyr Zelenskiy is expected to meet U.S. Vice President JD Vance in Munich on Friday.
Baker Hughes said U.S. energy firms this week added oil and natural gas rigs for a third consecutive for the first time since December 2023. The oil and gas rig count increased by two to 588 in the week ending February 14th. Baker Hughes said oil rigs increased by one to 481 this week, while gas rigs increased by one to 101.
IIR Energy said U.S. oil refiners are expected to shut in about 1.5 million bpd of capacity in the week ending February 14th, increasing available refining capacity by 84,000 bpd. Offline capacity is expected to fall to 1.3 million bpd in the week ending February 21st and fall further to 908,000 bpd in the week ending February 28th.
Early Market Call – as of 8:40 AM EDT
WTI – Mar $71.26, up 52 cents
RBOB – Mar $2.0953, up 54 points
HO – Mar $2.4590, down 28 points
