Brent has defied bearish equities for three days but is losing its stamina today. Brent gained 0.3% yesterday with a close of USD 74.03/b, the highest close since 27 February and almost at the high of the day. It traded as low as USD 73.23/b. Brent has now defied the equity selloff three days in a row by instead ticking steadily higher. A sign of current spot tightness. This morning however it is losing some of its stamina and is down 0.5% at USD 73.7/b along with negative equities and yet higher gold prices.

The new US Iran sanctions is creating frictions in getting its oil to market and helps keeping oil market tight. Part of the current tightness is due to the new US sanctions on Iran which. Ships containing 17 mb of its oil now sits idle east of Malaysia waiting (Bloomberg) for ship-to-ship transfers with China teapot refineries the normal final destination. But the latest US sanctions has probably made these refineries much more cautious. More friction before Iranian oil is reaching its final destination if at all. Tighter market.

Lower Saudi OSPs for May is expected. A signal of a softer market ahead as OPEC+ lifts production. Saudi Aramco is expected to reduce it official selling price (OSPs) for Arab Light to Asia for May deliveries by USD 2/b. A measure to make its oil more competitive in relative to other crudes suppliers. It is also a sign of a softer market ahead. Naturally so since OPEC+ is set to lift production in April and also most likely in May. If Saudi Aramco reduces its OSPs to Asia for May across its segments of crudes, then it is a signal it is expecting softer oil market conditions. But news today is only discussing Arab Light while the main tightness int the market today is centered around medium sour crude segment. A lowering of the OSPs for the heavier and more sour grades will thus be a more forceful bearish signal.

Front-end backwardation may ease as the Brent May contract rolls off early next week. The Brent May future will roll off early next week. It will be interesting to see how that affects the front-end 1-3mth backwardation as it is shifted out into summer where a softer market is expected.

Brent is boring like crazy with 30dma annualized volatility of just 21%. Waiting for something to happen.

Brent crude has defied three days of bearish equity markets and ticked higher instead. Caving in a bit this morning with yet another day of bearish equities and bullish gold.

Last week, U.S. crude oil refinery inputs averaged 15.8 million barrels per day, an increase of 87k bl/day from the previous week. Refineries operated at 87% of their total operable capacity during the period. Gasoline production declined, averaging 9.2 million barrels per day (m bl/d), while distillate (diesel) production also edged lower to 4.5 m bl/d.

U.S. crude oil imports averaged 6.2 m bl/d, up 810k barrels from the prior week. Over the past four weeks, imports have averaged 5.7 m bl/d, representing an 11% YoY decline compared to the same period last year.

Where we place most of our attention – and what continues to influence short-term price dynamics in both WTI and Brent crude – remains U.S. crude and product inventories. Total commercial petroleum inventories (excl. SPR) rose by 3.2 m bl, a relatively modest build that is unlikely to trigger major price reactions. Brent crude traded at around USD 73.9 per barrel when the data was released yesterday afternoon (16:30 CEST) and has since slid by USD 0.4/bl to USD 73.5/bl this morning, still among the highest price levels seen in March 2025.

Commercial crude oil inventories (excl. SPR) fell by 3.3 m bl, contrasting with last week’s build and offering some price support, though the draw was less severe than the API’s reported -4.6 m bl. Crude inventories now stand at 433.6 m bl, about 5% below the five-year average for this time of year. Gasoline inventories declined by 1.4 m bl (API: -3.3 m bl), though they remain 2% above the five-year average. Diesel inventories fell by 0.4 m bl (API: -1.3 m bl), leaving them 7% below seasonal norms.

Over the past four weeks, total products supplied – a proxy for U.S. demand – averaged 20.2 m bl/d, up 0.5% compared to the same period last year. Gasoline supplied averaged 8.9 m bl/d, down 0.2%, while diesel supplied came in at 3.9 m bl/d, up 1.8%. Jet fuel demand also showed strength, rising 3.9% over the same four-week period.

Higher last week along with equities and Iran sanctions. Brent crude gained 2.4% last week. It closed the week at USD 72.16/b and traded within a range of USD 69.9 – 72.51/b with the high of the week being set on Friday. New US sanctions towards Iran was one of the drivers while a continued rebound in global equities was an important ingredient as well. Brent crude is up 0.2% this morning at USD 72.3/b along with positive equities. 

First round panic over harsh Trump tariffs is lifting with hopes for more targeted tariffs. Concerns for global economic growth and oil demand growth due to unexpectedly harsh Trump tariffs initiated a sharp selloff in equities as well as oil. Crude oil and equities have rebounded together as the first-round panic on Trump tariffs has lifted. Equity futures are rising 0.5% or more this morning on hopes that the next round of Trump tariffs will be more targeted and less broadly damaging. Looking at equities this morning one should expect Brent to move yet higher today.

Speculators are putting money back into the market. Net long speculative positions rose 45 mb over the week to Tuesday last week following an almost non-stop selloff since late January.

No oil market surplus yet. The question is mid-year onwards. It’s about oil demand growth and OPEC+. The global oil market is not yet running a surplus, but it will likely do so by mid-year. Key will be:

1) How will global oil demand growth develop in response to Trump tariffs?

2) Will OPEC+ decide to lift production yet higher after its first hike in April?

OPEC+ has already decided to lift production in April. Our impression is that that decision was partially influenced by Donald Trump asking for more oil and a lower oil price. I.e. that OPEC+ (controlled by Russia and Saudi Arabia) now has a slightly different approach to how they set production targets. I.e. that it is no longer just about price but also about the political relationship with Donald Trump. The Joint Ministerial Monitoring Committee (JMMC) will meet on 3 April to decide what to do in May.

Net long speculative positions in Brent crude and WTI rose 45 mb over week to Tuesday last week.