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.

Brent crude prices have held onto gains after rising for four consecutive days, increasing by USD 2.8 per barrel over the past week (since last Tuesday). Late last week, we saw a significant uptick in prices, primarily driven by U.S. sanctions on Iran and a surge in speculative long positions, which rose by as much as 45 million barrels week-on-week (WoW).

Today, crude prices remain supported as fresh threats from the U.S. president add to upward momentum. President Trump has signaled that he will impose a hefty 25% tariff on countries purchasing crude oil from Venezuela, further tightening the global supply side. This move is naturally bolstering crude prices as concerns over reduced supply growth.

This latest development is particularly challenging for China’s private refiners (Teapots), which are already facing weak refining margins and excess capacity. The imposition of tariffs on Venezuelan crude could exacerbate these difficulties, making it even harder for these refineries to stay competitive.

As of now, Brent crude is trading at USD 73.3 per barrel, having increased by USD 0.2 per barrel since the market opening.