Crude Oil (CL=F) prices are trying to make up for missed trading action because of the Good Friday market closure, states Phil Flynn of the PRICE Futures Group.

The Easter Sunday night re-open priced in some of the bullish headlines that it could not react to only to give in to bearish headlines as the night wore on. Oil prices surged back to a three-week high before pulling back on China demand concerns.

No, I am not talking about the headline of Joe Biden’s announcement broken by the Wall Street Journal that the Interior Department would open up roughly 144,000 acres available for oil and gas drilling through a series of lease sales, an 80% reduction from the footprint of land that had been under evaluation for leasing. Companies will also be required to pay royalties of 18.75% of the value of what they extract, up from 12.5%. That was a delayed action for Biden and one that was made out of desperation to react to his failed policies.

While a step in the right direction, this action is just really being done to deflect blame from the administration for their policies that are squeezing the poor and middle-class. Policies that ultimately led to oil and gas being produced by countries with much lower environmental standards than the US. The move was a direct breaking of another Biden campaign promise and an admission that they have been wrong about energy policy. They should also apologize to the US oil and gas industry because of false accusations against the industry for price gouging. I am sure the well-funded green energy lobby is upset because they helped pay for this Biden anti-fossil fuel agenda.

No, it was another risk to the oil supply that rallied the oil market. Libya’s biggest oil field was once again shut-in at a time when the world cannot afford to lose any barrels. Bloomberg reported that the Sharara field in the west of the country was closed after protesters gathered at the site demanding Abdul Hamid Deborah’s ouster, according to people familiar with the matter. That came after the nearby El Feel deposit was halted for the same reason. Libyan crude production has averaged just over one million barrels a day this year, down from almost 1.2 million in 2021, according to data compiled by Bloomberg. The drop is costing the country millions of dollars in lost revenue.

S&P Global reported the 70,000 b/d El Feel oil field was closed on April 16 after protests demanding the ouster of the country’s prime minister, Abdul Hamid Dbeibah, the NOC said on its website. ”Production has stopped completely” as of April 17, it said, making it “impossible” to meet contractual obligations. Libya’s crude oil production was 1.07 million b/d in March, down 50,000 b/d on the month, according to estimates compiled by S&P Global Commodity Insights. The Zuetina terminal is also shut, with protests demanding the exit of the Government of National Accord and NOC Chairman Mustafa Sanalla, a source familiar with the situation told S&P Global. Operators will be forced to close, the person said. The NOC called on all sides to preserve what is left of the “already dilapidated and worn out infrastructure” after years of civil war.

There was also a tough talk from Iran on Israel. Reuters reported that Iran President Ebrahim Raisi has warned Israel against making even “the smallest movement” against Iran. The remark came on Monday as the Iranian military displayed homegrown weapons and defense systems marking National Army Day.

Reuters also reported that Mexican state oil company Pemex said on Saturday that it had brought under control a fire at its Salina Cruz refinery in the southern Oaxaca state without any injuries to personnel.

Yet concerns about Chinese demand brought the market back down. Reuters reported a rearview mirror story: “China refined 2% less oil in March than a year earlier, with throughput falling to its lowest level since October as a surge in crude oil prices squeezed margins and tight Covid-19 lockdowns hurt fuel consumption.” Also, Reuters had reported that China would release crude oil from its national strategic stockpiles around the Lunar New Year holidays that started on February first as part of a plan coordinated by the United States with other major consumers to reduce global prices, sources told Reuters. The sources, who know talks between the world’s top two crude consumers, said China agreed in late 2021 to release an unspecified amount of oil depending on price levels.

Despite the concerns about a Chinese oil release, the truth is that China’s economy is back in reopening mode. Oil demand will be back and offset the oil reserve release. As a reminder that despite the oil releases by the Biden administration, US crude oil is still 13% below the five-year average for this time of year. Total motor gasoline inventories decreased by 3.6 million barrels last week and are about 3% below the five-year average for this time of year. Distillate fuel inventories decreased by 2.9 million barrels last week and are about 17% below the five-year average for this time of year.

Look to buy breaks.

Natural gas is still surging as winter refuses to leave and demand for LNG is at a record. Russia’s risk to European supply is also adding to support.

Learn more about Phil Flynn by visiting Price Futures Group.