Crude Oil Pauses After Rally as CPI Sparks Risk-Off Move

WTI Crude Oil Futures (March)

Yesterday’s Settlement: 73.32, up +1.00 [+1.38%]

WTI Crude oil futures posted another strong rally yesterday on Gaza ceasefire fears and supply concerns. Also, Trump’s orders to implement tariffs on steel and aluminum products can be interpreted as a direct shot at Canada.

The ramp of Middle-Eastern tensions is something to be eyed closely, as “war” premium is just getting built back into this market.

The reduction of Russian and Iranian barrels (reportedly) available on the export market continues to underpin crude strength as Asian buyers are forced to seek other, non-discounted cargoes in the marketplace.

Today, futures are lower by -0.80 [-1.06%] to 72.54

Last night’s API report printed bearish which helped to put a lid on the recent momentum. The API report was as follows [thousand bbls]:

Crude: +9,000
Gasoline: -2,500
Distillates: -600
Estimates for today’s EIA report are as follows [thousand bbls]:

Crude: +2,305
Gasoline: +1,210
Distillates: -2,250
Refinery Utilization: +0.20%

OPEC released their monthly market outlook this morning where they kept demand estimates for 2025 and 2026 unchanged. The group also warned that Donald Trump’s trade actions would likely cause market volatility. Trump urged the group twice last week to raise production but the group is signaling they are in no hurry to appease the President.

At 7:30 CST, U.S. CPI data for January was released and came in sharply higher than expected. The CPI print is driving a notable risk-off reaction in markets today.

Technical Analysis:

Crude posted another impressive rally yesterday and settled above another three star level for the second day in a row. Headlines have driven price below this major three-star resistance zone of 72.97-73.24*** this morning but there’s a lot of trading left in the day.

Momentum has been exceptionally strong this week in Crude Oil, markets may need a day or two to catch a breather. Bullish catalysts are underpinning the markets and inflation flows may be coming into commodities. We remain cautiously bullish as headline risk continues to present significant risks to positions in the background

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