The US Department of Energy is expected to release nearly 1 million barrels of gasoline from the Northeast Gasoline Supply Reserve, created after Superstorm Sandy in 2014, and to be soon shut as part of President Biden’s March government funding package. Oil prices remain under pressure despite rising gasoline demand. A combination of crude inventory builds and high interest rates continued to weigh on oil prices this week, with Brent and WTI both trading near three-month lows, OilPrice said.

Oil prices have been declining for four consecutive days, driven lower by the Federal Reserve’s reluctance to commit to interest rate cuts this year as well as weak physical sentiment in the markets that saw backwardation in both WTI and ICE Brent drop to the lowest level seen this year. Notably improving US gasoline demand and the OPEC+ meeting might provide some upside next week, but Brent is unlikely to break out from its current $80-85 per barrel range. 

US hurricanes loom large on the agenda. US government agencies are warning of higher-than-usual hurricane activity this year as warm sea temperatures and falling wind shear conditions could result in seven major hurricanes in the season beginning June 1, more than double last year’s three hurricanes.

US midstream giant sees value in depleted fields. US pipeline operator Kinder Morgan purchased mature oil and gas-producing assets in West Texas, planning to tap into carbon capture incentives under the IRA, most notably a $60 per metric tonne tax credit for carbon sequestration. 

Canada still eyes full pipeline sale. As TMX loaded its first cargo this week, Canada’s government is amending regulations that would facilitate divestment of the pipeline’s stock to Indigenous groups without federal regulatory approval, seeking to sell the $25 billion project as soon as possible after a fourfold cost overrun.  

Spanish major clinches Venezuela waiver. Spain’s largest oil firm Repsol has received a license from the US Treasury Department, allowing it to continue and expand operations in Venezuela despite the April 18 sanctions snapback, aiming to double production at the Ceiba and Tomoporo fields to 40,000 b/d. 

Nigeria cannot agree on its own output figures. Nigerian government agencies report widely diverging crude production numbers with the Upstream Regulatory Commission putting April output at 1.28 million b/d whilst the national oil firm reported 1.7 million b/d, highlighting the lack of transparent information from the country. 

/Oilprices.com/