Kazakhstan: U.S. and Russian officials met in Saudi Arabia on Monday to discuss a broad ceasefire in Ukraine, with a focus on achieving a maritime ceasefire in the Black Sea first. These talks followed U.S. negotiations with Ukraine on Sunday. President Trump is pushing to end the three-year conflict, having recently spoken with both Ukrainian President Zelenskyy and Russian President Putin. President Trump, who has consistently advocated for ending the war in Ukraine, expressed satisfaction with the progress of the talks and complimented Putin's involvement. On Saturday, he mentioned that efforts to prevent further escalation in the conflict were "somewhat under control."
OPEC+ Oil Output: Iraq plans to increase its oil production capacity to over 6 million barrels per day (bpd) by 2029, according to the state news agency. Oil ministry undersecretary Bassem Mohamed Khodeir stated that Iraq aims to achieve this through oil exploration and nationwide drilling activities, highlighting a recent agreement with BP to redevelop four Kirkuk oil and gas fields. Additionally, reported in Friday's morning report, Kazakhstan's oil output has reached a record high this month on the back of oilfield expansion, further exceeding OPEC+ production quotas. The country has repeatedly exceeded its OPEC+ quotas in recent months and has promised to reduce output under pressure from OPEC+ leaders Saudi Arabia and Russia. However, it is finding it difficult to convince U.S. oil majors such as Chevron and ExxonMobil to reduce output from Kazakhstan’s biggest fields after the companies' spent tens of billions of dollars on expanding their projects.
U.S. Rig Counts: On Friday, oil and gas rig count, an early indicator of future production, rose by one to 593 for the week ending March 21. Despite this increase, Baker Hughes noted that the total count was still down by 31 rigs, or 5%, compared to the same time last year. Specifically, oil rigs decreased by one to 486, while gas rigs increased by two to 102. The rig count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil and gas prices over the past couple of years led energy firms to prioritize boosting shareholder returns and paying down debt over increasing output. Although analysts predict that U.S. spot crude prices will decline for a third consecutive year in 2025, the U.S. Energy Information Administration (EIA) projects that crude output will rise from a record 13.2 million barrels per day (bpd) in 2024 to around 13.6 million bpd in 2025.
Market Overview: The complex is showing strength to start the week, although that strength is quite weak and could flip to loses at any point in the day. With little new news to significantly direct traders we look to the technical side of things as we continue this teeter-totter ride with $70 a barrel lending a level of resistance and $65 a barrel as support. This week we will look for developments on ceasefire talks, sanctions on Iranian oil exports, as well as tariffs.
WTI Crude Daily Candlestick Chart
The chart above shows WTI crude trade ranges back to the beginning of calendar year 2023. Within the chart we can see over the past 2 plus years wide range of trade; however, draw your eyes to where we have traded most recently in the past 6 months circled in yellow. WTI has been able maintain itself within a trade range between $70 and $65 a barrel for a majority of time yet never trading at or below $65. Looking at the chart from that technical perspective, when oil prices are under $70 a barrel it may indicate a good time to look at filling barrels or forward contract. Reach out to your account manager with questions or to get updated contract quotes.
Oil prices rose by 1% on today after U.S. President Donald Trump announced a 25% tariff on countries purchasing oil and gas from Venezuela. However, the price increase was limited as the U.S. extended Chevron's deadline to wind down its Venezuelan operations to May 27. This extension eases some pressure on Chevron but increases it on other Venezuelan oil consumers. Additionally, OPEC+ is expected to proceed with a planned oil output hike in May, and ongoing talks to end the war in Ukraine could boost the supply of Russian crude to global markets.
