Stategic Petroleum Reserve: House Republicans have proposed spending $1.32 billion to refill the Strategic Petroleum Reserve (SPR), alongside $218 million for maintenance, aligning with former President Trump's pledge to restore reserve levels. The SPR, which dropped to a 40-year low after emergency sales under Biden, has since rebounded 15% but remains 37% below early 2021 levels. Most of the recent government oil purchases have come in under a $79.99/bbl cap, with current U.S. crude prices rising toward $70/bbl. The move comes as part of broader GOP budget plans that also propose over $5 trillion in tax breaks while cutting funding to Medicaid and green energy programs.
Oil Forecast: Goldman Sachs sees modest upside risk to its WTI crude price forecast for 2025 and 2026, citing recent U.S.-China trade de-escalation as a key driver. The bank estimates a $3–$4 per barrel upside to its base WTI forecast of $56/bbl in 2025 and $52/bbl in 2026. While reduced recession risk supports prices, Goldman still expects headwinds from strong non-U.S. shale supply growth and the planned OPEC+ export increases in May and June. Despite the optimism, the bank warns that trade-related tariff impacts could still weigh on U.S. real income, global GDP, and oil demand.
U.S. Economic Data: U.S. inflation ticked higher in April as the Consumer Price Index (CPI) rose 0.2%, driven largely by increases in shelter, natural gas, and electricity prices, according to the Bureau of Labor Statistics. Despite a 0.1% drop in the gasoline index, the broader energy index climbed 0.7% in April, though it remains down 3.7% over the past year. Natural gas utility prices surged 3.7% month-over-month and 15.7% year-over-year, while electricity rose 0.8% in April. Fuel oil prices declined again, marking a broader trend of volatility across energy categories, with natural gas showing seven consecutive months of increases.
Market Overview: Oil prices are falling this morning due to expectations of a rise in U.S. crude inventories and anticipation of OPEC's monthly report. The American Petroleum Institute reported an increase in crude stocks by 4.3 million barrels, but gasoline and distillate inventories decreased. Analysts noted that the draw in refined products suggests an under-supplied market, which could be positive in the long term. Official inventory data from the U.S. Energy Information Administration and OPEC's report are awaited for further market direction.
WTI Crude(CL) daily candlestick chart
WTI crude is currently trading within a range, with support at $60 a barrel and resistance at $65 a barrel. The relative strength index (RSI) stands at 52.9, indicating a neutral market sentiment. Traders are closely monitoring these levels for potential breakout or reversal signals. Market participants are also awaiting key inventory data and OPEC's monthly report for further direction.
Oil prices fell on Wednesday after U.S. government data revealed a rise in crude oil stockpiles, raising concerns about oversupply. The decline followed the Energy Information Administration's report of a 3.5 million barrel increase in crude stocks, contrary to analysts' early expectations of a draw. Additionally, a stronger U.S. dollar and increased supply from OPEC+ contributed to the downward pressure on prices. Diesel and gasoline prices however supported today after confirming anticipated draws.
