OPEC+: Several OPEC+ members are expected to push for a second consecutive accelerated oil output hike in June, following a larger than planned increase of 411,000 barrels per day in May. The proposal reflects ongoing tensions within the group over compliance, as countries like Kazakhstan and Iraq have consistently produced above their quotas. Kazakhstan has stated it will prioritize national interests and cannot limit output from independent producers. Saudi Arabia, frustrated by overproduction, has led the push for quicker output hikes, though not all members, including Russia, support the move due to fears of a price crash. Oil prices, already weakened by global trade tensions, dropped further in April, with Brent crude falling below $66 a barrel. The upcoming May 5th meeting among eight OPEC+ members will determine the June output plan as the group continues to unwind a 2.2 million barrels per day cut amid broader cuts lasting through next year.

U.S. Weekly Energy Stocks: U.S. crude oil stockpiles unexpectedly rose by 244,000 barrels last week to 443.1 million barrels, contrary to analysts’ expectations of a draw. This increase was largely due to a surge in net crude imports, which jumped by 1.14 million barrels per day to 2 million barrels per day, the biggest weekly rise since November 2024. Despite higher refinery crude runs and a utilization rate increase to 88.1%, gasoline and distillate inventories fell more than expected. Gasoline stocks dropped by 4.5 million barrels, well above the forecasted 1.4 million barrel draw, while distillate inventories fell by 2.4 million barrels to their lowest level since November 2023. The unexpected build in crude and sharp product draws came during a season typically marked by inventory builds, signaling strong product demand.

U.S. China: Trade relations between the U.S. and China are also impacting oil prices. Recent reports indicate that the U.S. may consider reducing tariffs on Chinese goods to facilitate trade negotiations. Such developments have the potential to boost global economic activity, thereby increasing oil demand. Conversely, prolonged trade disputes could dampen economic growth and suppress oil consumption. Market participants are closely monitoring these negotiations, as their outcomes could significantly influence oil demand forecasts.

Market Overview: The energy sector is starting out bullish this morning as investors balance expectations of increased OPEC+ output against mixed signals from U.S.-China trade talks and U.S.-Iran nuclear negotiations. Kazakhstan’s refusal to fully comply with production limits raised concerns about internal discord within OPEC+, echoing past disputes that led to Angola’s 2023 exit. Optimism around renewed U.S.-China trade talks, following China's call for tariff removals and U.S. signals of potential reductions, lent some support to prices. Meanwhile, ongoing U.S.-Iran nuclear discussions are being closely watched, although new U.S. sanctions on Iran’s energy sector have cast doubt on the likelihood of easing oil restrictions in the near term. Energy futures having little movement early with crude up $0.94 to $63.21, HO is up $0.0177 to $2.1446, and RBOB is up $0.0175 to $2.1014.

In 2024, U.S. petroleum product exports reached a record annual average of 6.6 million barrels per day rising by 495,000 barrels per day compared to 2023. The increase was driven by higher exports of distillate fuel oil and jet fuel, while motor gasoline exports declined. Imports of major petroleum products, such as gasoline, distillate fuel oil, and jet fuel, fell by 210,000 barrels per day from the previous year. Distillate fuel oil remained the largest share of U.S. transportation fuel exports and the second largest petroleum export by volume after propane. Distillate exports grew by 182,000 barrels per day to about 1.30 million barrels per day in 2024, though they remained below the 2017 record of 1.38 million barrels per day. The U.S. petroleum product exports in 2025 are on pace to surpass the number of barrels per day from 2024.

The energy complex saw markets with minor moves to start the morning and stayed bullish for most of the day. Crude oil markets continue to remain unpredictable as geopolitical tensions and shifting supply dynamics continue to drive investor sentiment. Recent U.S. sanctions on Iranian oil exports and a unprepared draw in U.S. crude inventories have supported prices. However, uncertainty around a potential OPEC+ output increase and internal disharmony among the member states has applied downward pressure. Overall, the market is balancing supply risks with demand concerns, keeping crude oil prices in a cautious trading range. At market close today crude oil finished up $0.52 to $62.79 a barrel, HO up to $2.1437, and RBOB up to $2.1057.