Oil prices sold off hard overnight along with other commodities like gold and silver as the prospects for peace and prosperity are readjusting global markets.
Oil prices fell hard after President Donald Trump said that the US and Iran are getting close to a deal on the country’s nuclear program. NBC News also reported that Iran was ready to sign a deal with conditions.
This is on the same day that the President secured big deals in the Middle East, and the Trump Administration said that India has offered to drop all tariffs on incoming US products.
It all comes the day after Boeing (NYSE:BA) said they got the biggest order for planes from Qatar Airways, and that will create and support nearly 400,000 jobs in the United States. Boeing’s stock reached its highest point in the past year on Wednesday after Qatari Airways announced a deal to buy 160 jets from the American aircraft company.
President Trump also secured $600 billion in investment commitment from Saudi Arabia and one of the things that’s going to impact energy, is talking about a massive upscaling of the Port Arthur refinery in the United states. With the Saudi investment if they decide to expand capacity it could make Port Arthur the largest refinery in the world.
This is because OPEC’s oil output actually fell by 106,000 barrels per day in April, even though the cartel was supposed to raise production. Apparently, drops in production in Iran, Venezuela, and Nigeria offset gains in other places, not to mention the fact that compensation cuts seemed to be happening, which means that the increase in oil supply isn’t nearly as big as people had feared.
Oil prices did get a little pressure with a surprise build in crude oil inventories as reported by the Energy Information Administration (EIA). The EIA reported that US crude inventories increased by 3.5 million barrels from the previous week, yet they remain 6% below the five-year average for this time of year.
Distillate inventories saw a significant reduction of 3.2 million barrels and are 16% below the five-year average, indicating strong demand from the agricultural sector and increased factory demand. Gasoline inventories also decreased by 1 million barrels, contrary to expectations for stronger gasoline demand. Moreover, the total product supplied over a four-week moving average fell to 19.9 million barrels per day, which is down 1.2% from the same period last year.
HFI Research notes that oil product storage is approaching multi-year lows, while refining margins remain strong. Additionally, it is highlighted that refinery utilization rates are aligning with seasonal norms.
However, refiners are hesitant to significantly increase throughput due to economic uncertainties.
IEA data shows global oil stocks rose by 25.1 million barrels per day in March, driven by a 57.8-million-barrel increase in crude oil. Total stocks at 7.671 million barrels remain 221 million barrels below the five-year average. OCD inventories increased by 3.1 million barrels, and non-OCD stocks grew by 21.3 million barrels. Oil on water rose slightly by 0.7 million barrels.
And that is kind of interesting because the International Energy Agency is raising their forecast for demand this year by 20,000 barrels to 740,000 barrels per day and in 2026 are raising their forecasts for global oil demand to by 70,000 they’re all today we did predict that the IEA would raise their demand forecast and we predict right now that they will have to do it again in the future.
The International Energy Agency has increased its demand forecast for this year by 20,000 barrels to 740,000 barrels per day. Additionally, they have raised their global oil demand forecast for 2026 by 70,000 barrels. We are not surprised as we predicted that the International Energy Agency would have to raise their demand forecast and we predict they’ll have to do it again in the next report.
OPEC on the other hand did not have to raise their demand forecast and kept it steady mainly because they had a higher projection. OPEC’s forecast for global oil demand growth in 2025 is 1.30 million barrels a day and it’s 1.28 million barrels a day for 2026 The International Energy Agency is going to have to play catch up with the OPEC forecast. It’s going to be more difficult because more than likely as Donald Trump secures trade deals, the demand forecast for oil is going to go even higher so OPEC is going to have to raise their demand forecast as well.
In the short term, the potential for peace is lowering prices despite some disappointment. President Vladimir Putin did not attend the proposed Ukraine-Russia peace talks in Istanbul, Turkey, after initially suggesting direct negotiations without preconditions. Instead, low-level officials were sent. President Trump planned to attend but will not as long as Putin remains absent.
President Trump tells Apple’s Tim Cook to stop building plants in India and start building them here in the United States. President trump said he had a little bit of a problem with Tim Cook yesterday he’s building all over India. Apple (NASDAQ:AAPL) did pledge to spend 500 billion in the United States over the next four years.
Generally, supply and demand fundamentals for oil are still very bullish but from the bigger picture the invisible hand of Donald Trump is holding down prices. With the possibility of more oil flowing freely from Iran, and the possibility that the talks between Russia and Ukraine could see a lifting of Russian sanctions in the future, it’s putting downward pressure on prices. Also talk of Saudi investment in US refining capacity could also keep prices under pressure. These events will keep away all bouncing back and forth, but we still think supply and demand will give us prices that will achieve in new highs shortly though the potential for peace may put us back in a range.
Natural gas prices are dropping due to weak short-term demand forecasts. Fox Weather warns of severe weather today as the eastern Pacific hurricane season begins, putting over 87 million people at risk from the upper Midwest to the Mid-Atlantic. Regions with the highest threat include Minnesota, Wisconsin, Illinois, Indiana, Michigan, and Ohio, with more than 20 million people under Level 3 risk for severe thunderstorms.