Inflation Reduction Act: U.S. House lawmakers proposed phasing out clean energy tax credits, reducing spending on electric vehicles and renewable energy, and reclaiming other climate-related funds to align with President Trump's budget agenda. The proposal includes repealing parts of the Inflation Reduction Act, ending tax credits for electric vehicle purchases and home energy efficiency improvements, and phasing out clean energy subsidies by 2031. Industry groups argue these moves will cost jobs and hinder efforts to expand domestic energy sources. Some tax credits for carbon capture and sustainable aviation fuel remain mostly intact, while clean-energy advocates warn the changes will disrupt the industry and raise energy costs. Lawmakers vote today on the matter.
U.S. & Saudi Arabia: U.S. President Donald Trump began a tour of Gulf states, starting with Saudi Arabia, focusing on securing trillions of dollars in investments. The Saudi-U.S. Investment Forum highlighted the long-standing energy relationship between the two nations, with Saudi Arabia pledging $600 billion and Trump aiming for $1 trillion in investments. Saudi Investment Minister Khalid al-Falih emphasized the expansion of business opportunities beyond energy. The forum included top U.S. business leaders like Elon Musk, who discussed the kingdom's economic diversification efforts under Vision 2030. Despite rising costs and falling oil prices, Saudi Arabia continues to push for economic reforms and large-scale projects.
Crop progress: As of Sunday, U.S. farmers had planted 62% of the nation's corn crop, surpassing analyst expectations and the five-year average of 56%, according to the USDA. Soybean planting was 48% complete, ahead of the five-year average of 37% and slightly above analysts' predictions. Limited rainfall in the U.S. Midwest allowed for rapid planting progress, while rains in the U.S. Plains benefited the winter wheat crop's development. The USDA rated 54% of the winter wheat crop in good to excellent condition, the highest for this time of year since 2019, and spring wheat planting was 66% complete, well ahead of the five-year average of 49%.
Market Overview: Oil prices are on the rise again today, driven by a temporary pause in the U.S.-China trade war, though gains were limited by rising supplies. The market is assessing the impact of the trade truce and the expected increase in OPEC+ supply in the coming months. Despite a 22% decline in international crude prices since January, refined product prices and refining margins have remained stable due to strong demand and reduced refining capacity in the U.S. and Europe.
Heating Oil (HO) daily candlestick chart
A look back to the start of the calendar year for heating oil futures show a 70 cent range from the highs in January to the lows in May. In the chart is shown a trade channel with support being offered at $1.96 and resistance slightly above $2.18. Both the 14-day and 25-day moving average are also lending themselves as support (green and purple lines). In blue at the bottom of the chart shows the relative strength index at a value of 53.2 indicating that the commodity is neither oversold nor overbought. Traders will be looking to these technical signals as the balance the headlines between tariffs and supply output.
Crude oil futures rose significantly on Tuesday, driven by a temporary reduction in U.S.-China tariffs and a favorable inflation report. The U.S. Labor Department reported a 2.3% rise in the Consumer Price Index over the past year, the smallest increase in four years, easing recession fears. OPEC+ plans to boost oil exports in May and June, potentially capping further price increases. Despite a decline in crude prices since January, demand for refined fuel remains strong due to reduced refining capacity in the U.S. and Europe. As the bullish momentum continues, keep an eye on the psychological level of support at $65 a barrel.
