3-5-21 RCC Energy Market Update

The energy complex ended the week with an exclamation point as prices surged at the close to push them to highs not seen in more than a year. Analysts continued to digest the news from yesterday that OPEC and its allies decided to roll current production cut levels into April as well as Saudi Arabia voluntary cut of 1 million barrels per day. Also helping support prices today was a stronger than expected US job report signaling the continued recovery efforts from the pandemic. However, according to Hans van Cleef, a senior energy economist at ABN Amro, believes “the market suggest a tightness that does not exist. Therefore, we continue to believe that the price risk is mainly downward and that current price is overshooting.” Looking ahead at the coming weeks will see if there is enough support to continue this rally or if a correction is due at some point. Analysts will continue to keep a close eye on US inventory reports after this week’s historic report for market direction. Lastly, as these prices have climbed to pre-pandemic levels there has been a steady increase in US oil rig counts increasing which was the case this week with the total count rising by one. To close out the week, crude oil added $2.26 today, distillate moved $0.0480 higher, and gasoline jumped up by $0.0668.