Recap: Oil futures slipped on Thursday after reaching an almost ten-year high, as sellers jumped on hopes that the U.S. and Iran will agree soon on a nuclear deal that could add barrels to a badly undersupplied market. Trading was explosive, with traders pushing the price of a barrel of crude oil to an almost ten-year high on concern that sanctions imposed on Russia after its invasion of Ukraine a week ago would disrupt global oil flows. Both WTI and Brent rose to multi-year highs earlier in the session, with Brent soaring to $119.77, its highest level since May 2012 and WTI reaching its highest level since September 2008 at $116.57 a barrel. Market sentiment shifted lower, as international traders are still wary of becoming entangled in sanctions. May Brent crude futures settled at $110.46/bbl, down $2.47, 2.19%. April WTI futures settled at $107.67/bbl, down $2.93, 2.65%.
At least 10 tankers failed to find buyers on Wednesday, indicating a lack of demand. Several media reports have suggested that a deal between the United States and Iran is nearly complete, which could bring more than a million bpd of oil, or about 1% of global supply. Negotiations to revive the pact have been going on for 10 months in Vienna, and diplomats are now believed to be in the final stage of talks. This is causing traders to rethink their position on this market. As for now, we would look for this market to try and fill the gap between $107.12 and $96.09, that was left by Wednesday’s open.
Fundamental News: IEA Executive Director, Fatih Birol, said International Energy Agency member countries have enough oil stocks to release more into the market to lower prices after Russia's invasion of Ukraine. He said "We have more than enough stocks to take further action if warranted. The 60 million barrels is only 4% of our stocks."
Iran’s Oil Minister, Javad Owji, said Iranian oil production capacity can reach its maximum less than two months after a nuclear deal is reached.
The head of the International Atomic Energy Agency will visit Tehran on Saturday, raising the prospect of progress on one of the last difficult issues blocking a revival of the 2015 Iran nuclear deal.
A White House official said all sides are working to clarify their stances on the most difficult issues in talks to revive the 2015 Iran nuclear deal.
Russian Foreign Minister, Sergei Lavrov, said the Russian military operation against Ukraine is aimed, among other things, at ensuring that Kyiv does not join NATO. He said Russian forces were attacking military targets in Ukraine but added that the term "collateral damage" has been in use since the Western campaigns in Iraq and Libya. Earlier, he stated that he believed some foreign leaders were preparing for war against Russia and added that Moscow would press on with its military operation in Ukraine until "the end". Ukrainian negotiator, Myhailo Podolyak, said that the second round of ceasefire talks with Russia had not yielded the results Kyiv hoped for but the sides reached an understanding on creating humanitarian corridors to evacuate civilians. It was the first time the two sides had agreed any form of progress on any issues since Russia invaded Ukraine a week ago. He said a third round of talks is scheduled to take place early next week.
Early Market Call – as of 8:05 AM EDT
WTI – Apr $114.33, up $3.87
RBOB – Apr $3.4194, up 13.5 cents
HO – Apr $3.6570, up 15.36 cents
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