Russia & Ukraine: The Kremlin announced on Tuesday that Russia and Ukraine have agreed to temporarily halt strikes on certain targets, including oil refineries, oil and gas pipelines, and nuclear power stations. A list shared on the Kremlin's Telegram channel also mentioned fuel storage facilities, pumping stations, and electricity generation and transmission infrastructure, such as power plants, substations, transformers, distributors, and hydroelectric dams. The Kremlin's statement noted that this list was "agreed between the Russian and American sides." In Kyiv, Ukrainian President Volodymyr Zelenskyy stated that during talks, Kyiv had provided U.S. officials with a list of facilities to be included. According to the statement, the temporary moratorium on strikes on energy infrastructure begins on March 18 and lasts for 30 days, with the possibility of extension by mutual agreement. If one party breaches the agreement, the other party is also released from compliance, the Kremlin added.
U.S. Consumer: Consumer confidence dropped 7.2 points to 92.9 this month, the lowest since January 2021, continuing a decline that started in December. The Conference Board's survey highlights growing pessimism among U.S. consumers, with expectations of higher inflation and a potential recession. This combination of slowing growth and rising inflation resembles "stagflation," a trend also noted by Federal Reserve officials.
U.S. Inventories: Yesterday afternoon the American Petroleum Institute (API) issued its weekly projection for changes in U.S. inventories. According to the API, crude is expected to see a draw of 4.6 million barrels, gas a draw of 3.28 million barrels and diesel a draw of 1.35 million barrels. Earlier estimates from the Rueter Poll called for a draw on crude of 0.956 million barrels a draw on gas of 1.83 million barrels and a draw of diesel of 1.568 million barrels. This morning's release from the Department of Energy will deliver the official data.
Market Overview: Oil prices are poised to start the day strong due to ongoing concerns about potential supply shortages. Traders are particularly focused on U.S. threats to impose tariffs on countries purchasing Venezuelan crude and the anticipated larger decline in U.S. inventories. Again, today we will watch to see if WTI crude can break the $70 resistance level. WTI hasn't traded above $70 a barrel since March 3rd of this year but the bullish trend we have seen in the past many sessions, it is possible we get there today.
RBOB Daily Candlestick chart
In a chart that looks similar to yesterday, we will now take a look at gasoline futures since the beginning of the calendar year. Gasoline futures have added over 20 cents, currently trading at $2.2203 and have blown through many technical levels of resistance. The first level of support is at the 14-day moving average (green) at $2.1629 followed by the 25-day (purple) and 50-day (blue). Resistance can be found at the high trade on 3/3/25 at $2.2489. Also shown at the bottom of the image is the relative strength index showing a value of 64.1 which is trending towards an overbought signal.
Oil prices saw strength today with the decline in U.S. crude oil inventories as well as gasoline and diesel stocks. Also supporting the market are concerns about tighter supply after the U.S. threats of tariffs to nations buying Venezuelan crude oil. WTI crude traded as high as $70.22 today, breaking through the phycological level of resistance of $70 a barrel, however, was unable to settle above that level at the end of the day closing at $69.65. The $70 level of resistance should be watched closely for the remainder of the week. Gas futures saw gains of $0.0241 while diesel remained relatively flat, up $0.0028.
