Markets are turning even higher today after setting some 2019 highs last week. OPEC’s supply cuts are continuing to create headwinds for markets, especially as we move towards the spring/summer demand season. Crude oil is currently trading at $59.04 this afternoon, up 52 cents.
Fuel prices are also trading higher this afternoon, though diesel is still recovering from a strong sell-off on Friday. Diesel prices are currently trading at $1.9743, up 0.7 cents from Friday’s close. Gasoline prices are $1.8841, gaining a much stronger 2.6 cents.
Markets feel bullish after the OPEC committee responsible for recommending changes suggested leaving the deal unchanged until June. Saudi’s Energy Minister Al-Falih suggested the April meeting would be cancelled because it was too soon to make a call on future oil market balance. Most expect OPEC to continue cuts in the latter half of the year, though the group may revise its quotas based on Iran and Venezuela sanctions.
Iran sanctions are currently coming into the spotlight as sanction waivers are set to expire in the next few months. US officials have declared that Iran could go to zero without significantly disrupting oil supplies, though there would undoubtedly be an impact on prices. So far no decision has been made. The countries receiving waivers accounted for 75% of Iran’s pre-sanction exports, so enforcing sanctions on those countries could cause Iranian output to dwindle quickly. Secretary of State Mike Pompeo was quoted during CERAWeek saying the US intends to take Iranian output to zero “as quickly as market conditions will permit.”