The markets were quiet at the end of last week as the NYMEX was closed in observance of Good Friday. The quiet day welcomed reprieve from market changes that started Monday and continued through Wednesday. Over the previous weekend the OPEC+ group made a surprise announcement of additional production cuts that pushed prices up over $4 a barrel on Monday. The Organization of Petroleum Exporting Countries and their allies including Russia, plan further cuts of about 1.6 million barrels per day from May through the rest of the year. Goldman Sachs estimated that the output reduction could provide a 7% boost to oil prices, contributing to higher Saudi Arabia and OPEC+ oil revenue. It is worth noting though, that in reported statistics this group was not even reaching agreed upon production levels, meaning a type of cut was already in place.
By Thursday however, it seemed the preliminary uproar was tamed, the market digested the news, and the close last night saw distillate down $.05 cents and gas ended even on the day. Hopefully the initial shock wave is now baked in, but for those that have pulled into a station recently, the shock may not be over. We are entering into the driving season in many communities. The U.S. is not sitting at a comfortable supply level according to the DOE report that came out Wednesday of this week (see charts below). It is great that the weather is warming up and families will be out and about enjoying spring/summer activities, but we all know how prices at the pump trend this time of year.