Oil Rebounds $1 Despite Rising OPEC Output, Gas Prices Slide
Oil prices have suddenly reversed higher today despite higher OPEC output, while Gas prices are tumbling toward $4.
The average U.S. gasoline price has declined for the third consecutive week, now sitting at $3.03 per gallon, reflecting the broader weakness in crude oil. WTI crude dropped to $65.30 yesterday before staging a bullish reversal, rising $2.50 to trade around $67.60 ahead of key market reports.
WTI Crude Oil Chart Daily – Recovery Despite Persistent Bearish Pressure
Despite today’s rebound, oil prices remain under pressure, as bearish factors outweigh short-term gains. Concerns over rising supply, a slowing global economy, and geopolitical developments—such as progress toward ending the Ukraine conflict—continue to weigh on sentiment.
OPEC released its latest report, maintaining global oil demand projections of 1.45 million barrels per day for 2025 and 1.43 million for 2026, while acknowledging that market volatility will persist before the economy stabilizes in 2025. Meanwhile, OPEC+ production increased by 363K barrels per day in February, with Kazakhstan leading the rise after opening a new oil field. However, officials have signaled that output will be adjusted soon to remain within agreed limits.
Weekly US Energy Inventory Data – Week Ending March 7
EIA Report:
- Crude Oil Inventories: +1.448M barrels vs +2.001M expected (Prior: -2.332M) – Lower-than-expected build.
- Gasoline Inventories: -5.737M barrels vs -1.882M expected – A much larger draw than anticipated, indicating strong demand.
- Distillate Inventories: -1.559M barrels vs -757K expected – Larger-than-expected decline, suggesting tighter supply.
- Refinery Utilization: -0.6% vs +0.4% expected – Unexpected drop, potentially impacting future supply levels.
Private API Data (Released March 6):
- Crude Oil: +4.247M barrels – Significantly higher build than the EIA report.
- Gasoline: -4.560M barrels – In line with strong gasoline draw in the EIA report.
- Distillates: +421K barrels – Small build, differing from the EIA’s reported draw.
This week’s data shows mixed signals for the energy market. The lower-than-expected crude build suggests stronger refinery demand, while the sharp gasoline drawdown points to robust consumer demand. However, the drop in refinery utilization could lead to tighter supply in the coming weeks.
Natural Gas Faces a Sharp Decline After Strong Rally
While crude oil saw a bounce, natural gas prices experienced a steep selloff, dropping $0.35 today and nearly $1 since Monday’s high of $4.89. Despite a strong uptrend since last summer, when prices fell below $2, natural gas is now facing its first major technical reversal.
After peaking just below $5 on Monday, the price formed an upside pin bar on the daily chart, signaling a bearish reversal. Today’s selloff accelerated despite ongoing trade tensions between the U.S. and Canada, with Canada threatening heavy tariffs on energy exports to the U.S..
Even with today’s drop, natural gas remains in a broader bullish trend. However, if prices break below key moving averages on the daily chart, it could signal a trend reversal, increasing downside risks.
US WTI Crude Oil Live Chart
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