Trade War Developments Continued to Impact the Market

Recap: The oil market ended lower after the market failed an early attempt to trend higher and snapped a two-day winning streak. Trade war developments continued to impact market sentiment, while Chinese inflation data over the weekend showing a decline in February consumer prices increased demand concerns. The market remained under pressure as U.S. import tariff concerns raised fears about a possible economic slowdown that could cut oil demand. The market retraced some of Friday’s losses and rallied to a high of $67.60 early in the session before it gave up all of its gains and breached Friday’s low of $66.12 and posted a low of $65.90 ahead of the close. The April WTI contract settled down $1.01 at $66.03 and later posted a new low of $65.80 in the post settlement period. The May Brent contract settled down $1.08 at $69.28. The product markets ended the session lower, with the heating oil market settling down 3.61 cents at $2.1799 and the RB market settling down 1.62 cents at $2.0925.

Technical Analysis: The market will likely retrace some of its losses before it continues on its downward trend amid the concerns over the global economy and demand. The market will also remain pressured amid expectations that the weekly petroleum stocks reports due out on Tuesday evening and Wednesday morning will show builds in crude stocks of 2 million barrels in the week ending March 7^th. The crude market is seen finding support at its low of $65.80, $65.59, $65.22, $63.95 and $63.61. Meanwhile, resistance is seen at its high of $67.60, $68.22, $68.56 and $70.60.

Fundamental News: U.S. Commerce Secretary, Howard Lutnick, said U.S. President Donald Trump will not let up his pressure on tariffs on Mexico, Canada and China related to their handling of fentanyl.

According to a statement from the U.S. State Department, U.S. Secretary of State Marco Rubio will visit Saudi Arabia over March 10^th-12^th for talks with Ukrainian counterparts. The Secretary of State will also have a meeting with Saudi Crown Prince Mohammed bin Salman. He will then travel to Canada for the March 12^th-14^th G7 foreign ministers’ meeting. President Donald Trump’s Middle East envoy Steve Witkoff said the U.S. expects substantial progress in talks with Ukraine this week and hopes that a deal on critical minerals can be signed. He said among important items on the table will be security protocols for the Ukrainians and territorial issues. President Volodymyr Zelenskiy traveled to Saudi Arabia to meet Crown Prince Mohammed bin Salman on Monday, ahead of talks on Tuesday between Ukrainian and U.S. officials on ending the war with Russia.

In one of his first meetings with oil and gas executives since being confirmed as U.S. Energy Secretary, Chris Wright said he intended to speed up permitting and support the industry. The world’s energy industry leaders are gathering at this year’s CERAWeek conference against the backdrop of declining oil prices that may undermine the administration’s increased output policy. He said he was happy OPEC was returning barrels to the marketplace and said that more energy was good for the globe. He also said that U.S. President could potentially exempt Canada’s oil from tariffs in April.

The head of the IEA, Fatih Birol, said there is a need for investment in existing oil and gas fields for global energy security.

IIR Energy said U.S. oil refiners are expected to shut in about 1.1 million bpd of capacity in the week ending March 14^th, increasing available refining capacity by 85,000 bpd. Offline capacity is expected to increase to 1.5 million bpd in the week ending March 21^st.

A least four gasoline marketers are preparing legal and regulatory challenges to the Colonial Pipeline over proposed changes in fuel shipping terms which the companies say will hurt their margins and increase fuel prices. Last week, Colonial sought approval from the Federal Energy Regulatory Commission to stop shipping different gasoline grades at the same time and eliminate shipments of Grade 5 gasoline.

Early Market Call – as of 8:30 AM EDT

WTI – Apr $66.88, up 87 cents

RBOB – Apr $2.1216, up 2.91 cents

HO – Apr $2.2046, up 2.47 cents

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