Russia & Ukraine: On Friday, Russia accused Ukraine of attacking its energy facilities despite an agreed moratorium on such strikes, claiming that a key gas infrastructure in the town of Sudzha was nearly destroyed. A Ukrainian official countered, stating that it was actually Russia that attacked the gas transit point in Sudzha. Reuters could not independently verify which side was responsible. On Tuesday, the United States announced separate agreements with Ukraine and Russia to pause their strikes in the Black Sea and against each other's energy targets. These agreements were seen as potential steps towards a full ceasefire and peace talks to end the three-year war. However, both sides have accused each other of violating the energy truce, highlighting the fragility of the U.S.-brokered agreements.
Permian Basin: U.S. oil producers are facing geological constraints as the Permian basin, the heart of the shale revolution, ages and yields more water and gas instead of oil. This could mean the U.S. is nearing peak oil production. The relentless drilling has exhausted much of the core areas, leading to concerns about future output. Industry experts predict that U.S. oil production might peak between 2027 and 2030, with a potential decline afterward. Despite this, current output is still rising, though growth is expected to slow significantly this year.
Russian Oil: Indian port authorities denied entry to the tanker Andaman Skies, carrying Russian crude, due to inadequate documentation, highlighting increased scrutiny of vessels with Russian oil. India, the largest buyer of seaborne Russian crude, saw Russian oil make up 35% of its crude imports in 2024. The tanker, flagged by Tanzania and built in 2004, lacked the required seaworthiness certification recognized by Indian authorities. This incident reflects the broader impact of U.S. sanctions on Russian oil supplies, complicating logistics for sellers and buyers.
Market Overview: Oil prices are set to see gains this week driven by changes in global oil sanctions, with new U.S. tariffs on Venezuelan crude and sanctions on China's imports from Iran. Additionally, U.S. crude inventories fell more than expected, indicating better demand. However, analysts caution that sharp gains in oil prices may not be sustained due to market uncertainties.
WTI Crude Daily Candlestick Chart
As we look at WTI crude trade for the past 6+ months, we can see that it has found a trade channel between $75 a barrel and $65 a barrel. There have been a couple times crude traded above $75 for a short period of time, however never traded below $65. Again today, crude is looking to make a push to break the $70 level of resistance, already trading above in the early morning. With limited new headlines to drive prices significantly higher or lower the market could really go either way depending on how traders interpret the technical signals.
Oil prices fell on Friday due to concerns that U.S. tariff wars could trigger a global recession, but they still posted a third consecutive weekly gain as the U.S. increased pressure on Venezuela and Iran. WTI closed at $69.36 a barrel, again staying under the strong resistance level of $70 a barrel. President Trump plans to announce new tariffs on a wide range of imports, raising fears of a recession. Despite these concerns, oil demand indicators have remained relatively stable. U.S. sanctions on Venezuela and Iran are expected to reduce their oil output, while OPEC+ is set to increase production starting in April.
