Crude oil prices are slightly lower today - both Brent and WTI are slightly weaker. Yesterday, the commodity strengthened as the US dollar weakened. While crude prices were weak during European trading hours, prices rose during US trading hours later in the day.
Turning to recent news, concerns regarding the Iran nuclear deal are dominating crude oil headlines. Yesterday, Iran's foreign minister said that US demands to to change the 2015 agreement were unacceptable. While European officials are looking to remain in the deal, President Trump has "all but decided" to exit the deal according to various reports in the media. In recent history, the commodity has been trading in a narrow range. While speculator positioning in the commodity has built up to very high levels, few are willing to short crude oil ahead of the Iran decision on May 12. So far, rising US production (which has now overtaken Saudi Arabian production) has also failed to dent the rally. Our short-term and medium-term outlook on crude remains bullish.
WTI is currently trading above $68.20. Brent crude is currently above $73.30.
Looking at US crude oil stocks, the most recent EIA figures (May 2) showed rising crude oil stocks and rising gasoline inventories. Crude oil inventories (+6.2m vs. +1.2m expected) were higher than expectations. Gasoline stocks were up (+1.2m vs. -0.7m expected) while distillate stocks (-3.9m vs. -1.5m expected) were down. Looking at reactions in markets, crude oil prices weakened immediately following the EIA report.