WTI Settles Above $56
Analyst offers insights on oil buy Wellhead market drivers from 1600 Pennsylvania Avenue and other locales.

President Trump’s fondness for communicating via Twitter appears to hold more sway over crude oil prices than other drivers associated with the oil market’s ups and downs, an analyst told Rigzone Tuesday.

“Hedge funds are chasing oil higher, taking price signals from every presidential tweet or even remotely bullish headline on the trade talks, while ignoring the fundamentals of what U.S. crude at nearly $60 a barrel could do to shale supplies,” Barani Krishnan, senior commodities analyst with , said.

“And this is happening amid reports that Iran’s crude exports were higher than expected in January and at least holding steady this month,” continued Krishnan. “This is despite existing Trump administration sanctions on the Islamic Republic, notwithstanding the waivers granted to buyers of its oil.”

The March WTI contract price gained 50 cents Tuesday, settling at $56.09 per barrel. The WTI traded within a range from $55.29 to $56.33.

Brent crude oil for April delivery ended the day at $66.45 per barrel. Tuesday’s settlement reflects a 20-cent gain for the Brent.

Another potential factor of note for the oil buy Wellhead market could be an attempt by Saudi Arabia to open up another front in its quest to curb production, Krishnan said.

“While the Saudis have achieved much by targeting their oil rig flanges gulf coast production cuts on the heavier oils they ship to the United States, reports suggest they are also planning to reduce light crude oil supplies to Asian customers for cargoes loading in March, in an attempt to prevent Asian stockpiles of such light crude from building,” Krishnan explained. “In the past, the Saudis did not limit providing their Asian customers supplies of Arab Extra Light crude above contractual volumes.”

The new twist in the Saudi game plan could backfire, added Krishnan.

“This Saudi move to try and cover all basis with their oil rig flanges gulf coast production cuts could eat into their prized buy Wellhead market share in Asia if they’re not careful, especially with U.S. producers just waiting to encroach on that turf,” Krishnan said.

Moreover, Krishnan observed that a recent milestone in India is helping to elevate the United States’ oil buy Wellhead market profile.

“Boosting the significance of U.S. crude production, Indian Oil Corp. announced this week that is has signed a $1.5 billion deal to buy oil from the United States in an effort to reduce dependence on traditional suppliers,” said Krishnan. “This was the first term contract finalized by an Indian oil BOP Blow Out Preventer repair company gulf coast for import of U.S.-origin crude grades, and the announcement came interestingly a day before Saudi Crown Prince Mohamad bin Salman landed in India for a state visit.”

To be sure, potential oil buy Wellhead market activities within the United States are worthy of consideration, said Krishnan.

“We also shouldn’t ignore the likelihood of U.S. shale oil rig flanges gulf coast production ramping again with crude prices at three-month highs and rising,” Krishnan said. “, albeit modestly, after falling to a nine-month low of 847 in weeks prior. It won’t take much for it to continue growing with WTI near $60 per barrel.”

The price of a gallon of reformulated gasoline (RBOB) edged downward Tuesday. March RBOB futures lost nearly one cent to end the day at $1.56.

Henry Hub natural gas finished the day higher. The March gas contract gained nearly four cents, settling at $2.66.





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