Author: BlackMask Financial

With Brent crude oil closing in on $90 per barrel on Wednesday, Bank of America energy analysts have boosted their price forecast for this year to average $86 per barrel and peak this summer at $95 per barrel.Citing an improving global economic outlook and tightening inventories, Bank of America is sees Brent crude averaging $86 per barrel, up from its earlier forecast of $80, and the U.S. crude oil benchmark, West Texas Intermediate (WTI), averaging $81 per barrel, up from its previous forecast of $75 per barrel. The predicted summer peak of $95 for Brent is hinged on expectations for a summer driving season against the backdrop of tighter-than-expected supply.

“Low inventories across the oil complex, OPEC+ output cuts, geopolitical tensions, and robust economic growth figures have flipped price trends and now point to a tighter-than-expected summer driving season, supporting firm backwardation in crude and products,” the bank said in a statement carried by the Oil Price Information Service (OPIS), run by Dow Jones & Co.

On the geopolitical front, BoA is focusing on rising tensions between the U.S. and Iran, Russia and Venezuela, as well as the ongoing Houthi attacks on the Red Sea shipping route and Ukrainian targeting of Russian refineries. On the U.S. domestic front, BoA is watching American shale production, which it says is slowing.

The bank also said that OPEC+ output cuts have prompted speculators to pour large amounts of investment dollars into oil.

In terms of global economic outlook, BoA said it expects stronger economic growth to buoy oil markets in the next two quarters of this year.
Also on Tuesday, speaking to Yahoo Finance, Rystad Energy SVP and Head of Global Oil Macro & North America Research Director Claudio Galimberti suggested that OPEC+ cuts and geopolitical tensions could lead to triple-digit oil prices as “OPEC cuts have created a huge deficit” while “demand remains strong.”

Commercial crude oil inventories in the United States, which are not taking into account those in the Strategic Petroleum Reserve, increased by 3.2 million barrels to 451.4 million barrels in the week ending March 29, the Energy Information Administration (EIA) revealed in its report on Wednesday. The figure marked a larger-than-expected buildup. The country’s inventories now stand about 2% below the five-year average for this time of year. US crude oil refinery inputs averaged 15.9 million barrels per day for the corresponding timeframe, which is 35,000 barrels per day more than the previous week’s average. During the reported week, refineries operated at 88.6% of their operable capacity last week, while gasoline production accelerated, averaging 10 million barrels per day. Imports of crude oil in the country averaged 6.6 million barrels per day last week, down by 85,000 barrels per day. Total commercial petroleum inventories tumbled by 2.2 million barrels last week.

The prices of precious metals rose late Sunday, with gold hitting a fresh all-time high of $2,254.40. The surge follows data released on Friday, suggesting a cooling in the Fed’s preferred inflation measure in February, suggesting a potential reduction in borrowing costs within the year, despite the central bank’s overall cautious stance. So far this year, gold has outperformed many major commodities, rising more than 9% in the first quarter alone. Possible monetary easing by major central banks and ongoing tensions in regions such as the Middle East and Ukraine have contributed to gold’s status as a highly desired safe-haven asset.After reaching its intraday high, gold advanced by 0.80% at 8:35 pm ET to sell for $2,251.43 per ounce. Silver increased by 0.83% to $25.19 per ounce. Platinum went up by 0.33% to $913.86 per ounce. One minute later, palladium gained 0.22% to sell for $1,005.15 per ounce.

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During Monday’s virtual meeting between the United States and Israeli officials, the formers expressed serious concern about the looming threat of famine in Gaza and strongly criticized the Israeli Defense Forces’ (IDF) plans for Rafah, Israel’s Channel 12 reported on Tuesday, citing a readout of the meeting. “You’re going to be responsible for the third famine crisis of the 21st century. That is not something we can accept as partners. The [Rafah] evacuation plan you’ve presented thus far is not impressive and is not implementable,” the broadcaster added, citing US National Security Advisor (NSA) Jake Sullivan. The report further stated that the American representatives reiterated that if Israel wants approval from the US for any operation in Rafah, they must provide a viable plan for the “day after” in Gaza.

Ukrainian drones hit the primary refining unit of Russia’s third-largest refinery southeast of Moscow more than 800 miles from the front line, Reuters reported on Tuesday. The Taneco refinery of Russian company Tatneft in Tatarstan, an industrialized region southeast of Moscow, was attacked by Ukrainian drones in the latest such attack from Ukraine on Russian refining infrastructure.The refinery has a capacity to process 340,000 barrels per day (bpd) of crude. Its primary refining unit, with a capacity to process about 155,000 bpd, was hit in Tuesday’s attack, according to pictures seen by Reuters. The unit caught fire, which was swiftly extinguished, Russian media report. They also quote Ramil Mullin, the mayor of the city of Nizhnekamsk, where the refinery is located, as saying that there have been no injured people in the attack. A source with the Ukrainian intelligence in Kyiv told Reuters that Ukraine hit a major Russian oil facility in Tatarstan to reduce Russian oil revenues. Ukraine has stepped up attacks on oil refineries in Russia in recent weeks, which have reduced Russian refining capacity, and which, reportedly, have the White House concerned about rising international prices. The United States has repeatedly urged Ukraine to halt its drone attacks on Russian oil refineries due to Washington’s assessment that the strikes could lead to Russian retaliation and push up global oil prices, the Financial Times reported last month, citing sources familiar with the exchange. According to Reuters estimates, the amount of Russian oil refining capacity that has been taken offline due to Ukrainian drone strikes is 14% of Russia’s total refining capacity.Calculations show that 900,000 bpd of refining capacity have been taken offline by drone strikes, Reuters reported last week.

• Senior general killed in air strike on embassy compound
• Tehran says Israel bears full responsibility for consequences

Iran said it would take revenge on Israel for a deadly air strike on its embassy compound in Syria — a rare direct confrontation in the adversaries’ escalating proxy conflict over the war in Gaza.

“The crime won’t remain unanswered,” Iranian President Ebrahim Raisi said, according to the semi-official Tasnim news agency.

The strike in Damascus late Monday killed at least seven Iranian personnel including senior military commanders and destroyed the consulate building, according to Iranian state media. Israel hasn’t confirmed the attack, in keeping with its usual response to accusations of targeting Iran.

 

Crude oil prices for front-month contracts rose on Monday, with the main oil benchmark for North America, West Texas Intermediate, reaching its highest level since late October 2023. The upward movement of oil prices appeared to be propelled by stronger-than-expected manufacturing activity in the United States which seemingly brightened the demand outlook at the start of the second quarter. The ongoing turmoil in the Middle East and Ukraine further exerted pressure on crude prices. West Texas Intermediate (WTI) for May delivery rose 0.90% to sell at $84.03 per barrel at 11:02 am ET. Brent for June settlement was up 0.63% to $87.63 a barrel at the same time. NN: You got to love the golden cross

DTEK, Ukraine’s largest private energy provider, reported on Saturday significant damages to its infrastructure due to Russian missile and drone attacks,

According to the head of the firm, Dmytro Sakharuk, five of its six plants were damaged or destroyed, resulting in the loss of 80% of its generating capacity, with repairs potentially taking up to 18 months.

President Volodymyr Zelensky condemned the attacks in his nightly address, describing them as “vile strikes” aimed at debilitating Ukraine’s energy capabilities.

Ukrainian President Volodymyr Zelensky said in an interview with The Washington Post published on Friday that his country’s forces would have to begin to retreat in its war against Russia unless the United States provides Kiev with more weapons and other military aid. “If there is no US support, it means that we have no air defense, no Patriot missiles, no jammers  for electronic warfare, no 155-milimeter artillery rounds,” Zelensky claimed. “It means we will go back, retreat, step by step, in small steps,” he added. The Ukrainian president insisted his country’s troops are “trying to find some way not to retreat” and that the military’s “smart steps” after Russia’s takeover of Avdiivka helped stabilize the situation for the time being. Still he insisted Ukraine must take steps to launch a counteroffensive because if it doesn’t, “Russia will do it.”

Russia destroys Ukrainian ammo depot in Dnieper direction

The Russian Defense Ministry said on Saturday that the Russian military destroyed a Ukrainian ammunition depot on the right bank of the Dnieper River. The troops also destroyed Ukrainian camouflaged firing positions, the ministry said. The Russian forces used kamikaze drones to attack Ukrainian soldiers in trenches, the ministry added. It did not provide an estimate of damage and casualties.

Power outages hit Odessa region

Emergency power outages were observed in Odessa and its surrounding region due to damages sustained by an energy facility, as reported by energy utility company Ukrenergo on Sunday.  The disruption resulted in emergency shutdowns in Odessa and nearby areas due to equipment damage, with potential for increased shutdowns as consumption rises. Last night, an air raid alert was issued across Ukraine, including Odessa, and this morning, Natalya Gumenyuk, the official representative of the operational command “South” of the Armed Forces of Ukraine, confirmed damage to the energy facility area.

NN: Ukraine is running out of ammo and becoming more desperate by the day. And desperate people do desperate things. Like bombing Russian oil export terminals on the Baltic and Black sea. I am sure $5.00 gasoline will get Biden get reelection attention.