Oil Price Rises Despite Larger US Crude Stocks. Russian Production Worries / Commodities / Crude Oil
The two global crude benchmarks are stillenjoying momentum that began on Thursday – despite larger-than-expected UScrude inventories – following reports from the financial press that Russia willcut oil exports from its western ports by 25% per month in March compared toFebruary in response to Western sanctions.
These claims, however, have not yet beenconfirmed by the Russian Ministry of Energy.
The western ports of Primorsk, Ust-Luga,and Novorossiysk export around 2.5 million barrels of crude a day. Therefore, a25% reduction would imply a reduction in exports of 625,000 barrels per day, orabout 0.6% of the world oil supply.
This contraction would thus exceed thatannounced by the Russian Deputy Prime Minister in charge of Energy, AlexanderNovak, earlier in February by 500,000 barrels per day.
In addition to the disruptions in supplyfrom Russia, there is also growing demand from China and India, which mightshow signs of a market that could become even more tight.
UnitedStates Crude Oil Inventories
Commercial crude oil reserves postedanother strong weekly rise last week in the United States, according to figuresfrom the US Energy Information Agency (EIA), marking their ninth consecutiveincrease.
These commercial stocks rose by 7.6million barrels, well above the 2.8 million barrels forecast by analysts.
This new increase in crude oil reservesshould have a downward effect on prices, but it reflects lower refineryactivity due to the infrastructure maintenance season. On the other hand, itwas accompanied by a decline in gasoline stocks:
UnitedStates Gasoline Inventories 
The pressure on the supply of distilledproducts can be explained by the relatively mild winter weather both in theUnited States and in Europe.
However, recession fears continue todominate the market – thus capping crude's gains – as major central bankscontinue to send signals that further interest rate hikes are in sight amidhigh inflation.
Chartingand Analysis 
On a macroeconomic level, the US dollarindex (DXY/USDX) is returning to $105 territory, with the next quarterly pivottarget of $107 if the index breaks above 105.631 (its previous swing high), asI mentioned inmy previous article that such a breakout could be a sign of strongerbullish enthusiasm.
On the West Texas Intermediate (WTI)crude oil April 2023 futures contract, the bears gave up just on the lower sideof the short-term regression channel, thus decreasing chances of a breakoutbelow the short-term regression channel (the small one encompassed into thelarger one). Now, as the market recovers, it is probably aiming towards thequarterly pivot located around the $80 psychological level as the next target.
Have a nice weekend!
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Thank you.
Sebastien Bischeri
Oil & Gas Trading Strategist
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