Russia & Ukraine: Russia's Defense Ministry reported that Ukraine launched three attacks on Russian civilian energy infrastructure on Monday. These attacks targeted infrastructure owned by Rosseti, the Svatovo gas distribution station in eastern Ukraine, and an underground gas storage facility in Crimea. This occurred while Russian and U.S. officials were discussing a possible ceasefire in Saudi Arabia. Russia has agreed to a moratorium on its attacks on Ukrainian energy infrastructure following a call between Presidents Putin and Trump. Ukraine has not declared a similar moratorium but is open to doing so if a formal agreement is reached.
OPEC+: OPEC+ is expected to continue with its plan to increase oil output for the second month in a row in May, according to four sources cited by Reuters. This decision comes amid stable oil prices and efforts to make some members reduce production to offset past overproduction. The group, which includes OPEC and its allies led by Russia and accounts for over 40% of the world's oil production, plans to raise output by 135,000 barrels per day in May. This marks the second monthly increase as part of a strategy to gradually reverse the significant production cuts implemented since 2022. OPEC+ is also working to adjust output targets for members who have consistently met their quotas, while urging those who have exceeded their targets to cut back and produce below their quotas temporarily to balance the overall output.
Venezuela: U.S. President Donald Trump announced a 25% tariff on countries buying oil or gas from Venezuela. Simultaneously, the U.S. extended Chevron's deadline to winddown its Venezuelan operations to May 27. This extension allows Chevron to continue its operations temporarily, securing payments for oil deliveries to U.S. customers and preventing a sudden drop in Venezuelan crude exports. The tariff aims to pressure foreign buyers of Venezuelan oil, similar to previous sanctions, but it is unclear how the tariff will be enforced.
Market Overview: WTI and the products are creeping up once again this morning on the news of a 25% tariff to countries that buy Venezuelan oil. Those gains will likely be capped due to OPEC+ plans to release more oil to the global market. This recent rally in oil prices has inched WTI closer to that key level of resistance of $70 a barrel. Watch oil prices today to see if that level can be broken, or if it will again hold.
Heating Oil Daily Candlestick chart
Shown today is heating oil Nymex values since the beginning of the calendar year. In this chart, we can see the rally that heating oil has been on since mid-March, gaining over 10 cents since the low on 3/14/25. With the current trade value at $2.2795, heating oil is sitting between the 25-day moving average (green) at $2.2850 and the 14-day moving average (purple) at $2.2159. At the bottom of the chart is the relative strength index at 49.4, indicating a neutral position telling us that the market is neither oversold nor overbought at this time.
Oil prices dropped today after Ukraine's President Volodymyr Zelenskyy agreed to a truce with Russia, covering the Black Sea and energy infrastructure. Despite this, crude prices found some support from the potential for tighter global supply due to possible U.S. tariffs on countries purchasing Venezuelan oil. Ukrainian President Zelenskyy announced the truce was effective immediately but mentioned he would seek more weapons from U.S. President Donald Trump and push for sanctions against Russia if the truce was violated. Gasoline saw small gains on the day and diesel posted modest gains.
