Oil prices weakened after reports that President Trump discouraged an Israeli attack on Iran’s nuclear infrastructure, indicating his desire to avoid war with Iran and give them a chance to negotiate. But the petroleum markets are expected to receive support from recent monthly data, notes Phil Flynn, senior energy analyst at The PRICE Futures Group.
A report from the Joint Organisations Data Initiative (JODI) showed that oil demand increased by 2.1 million barrels last month compared to January levels. Meanwhile, oil production rose by only 253,000 barrels per day, and overall crude oil inventories increased by 18.9 million barrels month-over-month. Supplies of oil products were below the five-year average by 188.2 million barrels.
United States Oil Fund (USO)
Overall oil product inventories decreased by 10.8 million barrels from the previous month. Diesel demand remains strong despite tariff concerns, driven by below-normal temperatures and tight supplies.
So, if you analyze the numbers and look at supply and demand, oil prices and product prices are still undervalued. There does seem to be a risk-off premium that’s keeping prices low...but the buoyancy in markets recently suggests we’re going to get prices more in line with supply and demand reality.
Natural gas prices are experiencing a decline, characteristic of the shoulder season. However, this downturn presents an opportunity to lock in prices for the upcoming summer. The prevailing sentiment suggests that natural gas supplies will become increasingly scarce over the next year and a half. Thus, it is prudent to consider strategies to capitalize on what may be a long-term bottom in this market.
