Crude oil prices are flat today - both WTI and Brent crude are currently trading sideways. Yesterday, crude oil prices reversed and gave up some of their recent gains. There were no obvious catalysts for yesterday's move lower. In general, crude oil prices are fairly volatile and seldom move in a straight line.
Turning to the latest news, Russia’s energy minister Novak stated that OPEC and Russia may ease output restrictions this year. This contradicts yesterday's comments from Saudi Arabia stating that supply restrictions were more likely to continue. While OPEC supply cuts had a limited impact at the outset of 2017, lower supply has helped crude oil rally over the past 9 months. Global inventory levels have now fallen to five year averages, while Trump is likely to reinstate sanctions against Iran. Ahead of the Iran decision on May 12, crude oil prices are likely to remain supported. Our short-term and medium-term outlook on crude remains bullish.
WTI is currently trading above $68.0. Brent crude is currently above $73.50.
Looking at US crude oil stocks, the most recent EIA figures (April 18) showed falling crude oil stocks and falling gasoline inventories. Crude oil inventories fell (-1.1m vs. -1.4m expected). Gasoline stocks were down (-3.0m vs. -0.3m expected) while distillate stocks (-3.0m vs. -0.4m expected) were also down. Looking at reactions in markets, crude oil prices strengthened following the EIA report.