RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

By: Alexander Turro

Oil prices reverse early losses and turn higher as of Thursday afternoon as easing restrictions in Shanghai would lead to an improvement in fuel demand. In addition, Chinese fuel exports declined for the month of April which was largely offset by signs of significant Chinese reserve building. This was compounded by reports that Venezuelan oil export sanctions could soon be lifted as talks between the US and Venezuela have resumed. Support has been lent by the possibility of a ban on Russian oil imports by the European Union, which would include a complete ban in six months’ time with Hungary being the most vocal critic.

On Wednesday, the European Commission unrelieved a $220 Billion plan for Europe to alleviate their reliance on Russian fossil fuels by 2027. Crude stocks fell -3.394 million barrels for the first time in three weeks against an expectation of a build with SPR stocks falling -5.0 million barrels to 537.98 million barrels, the lowest since 1987, according to the EIA. Refinery utilization was up +1.8% to 91.8%, the highest in six weeks with refinery inputs increasing as well amid tight product inventories and strong export demand.  

US crude inventories are now down -13.4% year over year and remain down -4% below the 5 year low ahead of the upcoming driving season. The market is making a series of lower highs from its cycle peak with oil volatility (OVX) remaining elevated in the 50s with today’s range seen between 99.17 – 114.56.

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Alexander Turro

Market Strategist
Alex began his career with an IB at the Chicago Board of Trade after graduating with a BA/BS from Indiana University. He then went on to work for a proprietary trading software company before joining RJO Futures as a Market Strategist.
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