Week in Review: Bearish or Bullish? Fuel Prices Teeter as Global Pressures Mount

This week, fuel markets faced a whirlwind of factors driving both bearish and bullish pressures, leaving prices caught between competing forces. A strong rebound in refinery utilization led to a draw in crude inventories, but that draw was overshadowed by builds in refined product inventories, fueling bearish sentiment across the market. While refiners are ramping up production, crude inventories remain well below seasonal norms, raising concerns that continued stock draws could eventually tip prices higher, particularly if geopolitical tensions escalate. Increased sanctions on Iran and Russia, coupled with ongoing Ukrainian attacks on Russian infrastructure, have added to concerns about tightening global supply.

U.S. crude production continues to grow, but not at a pace fast enough to offset these global supply risks. Even with the current “drill baby drill” mentality, expanding production requires time and investment, limiting the immediate impact. At the same time, the U.S. Strategic Petroleum Reserve (SPR) remains historically low, leaving the government with limited flexibility to respond to any sudden supply shocks. If the U.S. begins replenishing the SPR, it could create a price floor, but for now, OPEC+ remains the wildcard. The group is expected to increase production in April, though internal debates persist over whether to hold steady on mixed demand signals. Any reversal of that decision could quickly shift prices higher, dragging refined product prices up along with crude.

Economic uncertainty further complicates the market outlook. Persistent inflation, rising consumer debt, and widespread layoffs are all raising fears of a potential recession, which could weaken demand for fuel and limit price gains. These macroeconomic concerns have influenced volatility in oil markets, particularly following President Trump’s announcement of new tariffs on imports from Canada, Mexico, and China. The proposed 25% tariffs on Mexican and Canadian imports, along with an additional 10% tariff on Chinese goods, have raised alarms about global trade disruptions, higher consumer prices, and slower economic growth. Trump framed the tariffs as a response to illicit drug trafficking, tying their removal to concrete action from U.S. trading partners. Markets remain skeptical, however, with many worrying the tariffs could ultimately dampen global fuel demand.

Meanwhile, Iraq’s announcement that it will resume crude exports from the Kurdistan region through the Iraq-Turkey pipeline has raised fresh concerns about compliance with OPEC+ production targets. Starting with 185,000 bpd, Iraq’s exports are expected to gradually increase, potentially adding downward pressure to prices. Combined with uncertainty around OPEC+ production policy for April and ongoing peace talks between Russia and Ukraine, more Russian oil could come back into global markets.

Prices in Review

Crude opened on Monday at $69.80, rose slightly on Tuesday, and trailed off during Wednesday and Thursday sessions. This morning, crude opened at $70.17, an overall increase of 37 cents or 0.53%.

On Monday, diesel opened at $2.4270, increased on Tuesday, and then saw some steady declines throughout the week before picking back up on Friday. This morning, diesel opened at $2.38, an overall decrease of 4 cents or 1.93%.

Gasoline opened the week at $2.0258, increased slightly on Tuesday before decreasing over the next few days. This morning, gasoline opened at $1.9857, an overall decrease of 4 cents or 1.98%.