Demand fears are still holding back the crude oil market along with the prospect of a deal to get Iranian oil back on the market. Drone attacks on Saudi oil fields suggest that Iran is still not worthy to get sanctions lifted but the Biden administration does not care. Tanker Trackers says that another 1.5 million barrels of Iranian crude oil are expected to arrive this week in Baniyas, Syria. In the meantime, May Day, Monday is reducing volume yet there are sign that U.S. gasoline demand is surging. That should lead to big draws in crude in the coming weeks. Outside commodities are rocking so that should lend support despite covid fears. We think breaks should be bought today!

Bloomberg News reports that, “Iraq, OPEC’s second-biggest oil producer, said crude prices would probably remain around $65 a barrel in the coming months and announced it’s considering buying Exxon Mobil Corp.’s stake in one of the world’s biggest fields. The Organization of Petroleum Exporting that countries and its allies — a 23-nation grouping known as OPEC+ — will continue trying to keep crude prices “within normal averages,” Oil Minister Ihsan Abdul Jabbar told reporters in Baghdad. “There is no concern about a drop in prices.”

The comments suggest OPEC+ remains confident about the outlook for energy demand, despite the surge in coronavirus cases in India, the third-largest oil importer. The group of major exporters began unprecedented supply cuts last year to bolster prices as the pandemic spread. It plans to ease the restrictions between May and July and increase daily output by just over 2 million barrels. Baghdad may end up buying Exxon’s 32.7% stake in the West Qurna-1 oil field in southern Iraq, the minister said. If so, the Iraqi government would probably purchase it through state-owned Basra Oil Co., he said.

Andrew Weissman of EWB Analytics reports, “bullish momentum for natural gas proved resilient last week, overcoming a 9.7 Bcf/d week-over-week decline in weather-driven demand. The May contract rolled off the board at $2.925/MMBtu and the June contract shook off a bearish Storage Report to retain its gains as the front month. After soaring 32.6¢/MMBtu (12.5%) in three weeks in the midst of the shoulder season, however, with large 95 Bcf/week injections projected during May, the rally may be due for a near-term pause before robust fundamentals carry higher into early summer.

Phil Flynn

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