Energy Futures Pulling Back This Morning With Gasoline Leading To Start The Day

Energy futures are pulling back so far this morning, with gasoline prices leading the way lower with ~1% losses to start the day. The American crude oil benchmark is following close behind, sporting a 60 cent per barrel haircut (down .6%) while its distillate counterpart is off only .83 cents, or -.3%, to start the week.

Gasoline prices are shying away from the new 2023 high they set last week. May RBOB futures exchanged hands at $2.8428 per gallon on Thursday before pulling back to settle at $2.8133. May HO futures, on the other hand, are struggling to break out of their sideways trading pattern, bounding it at $2.60 on the lower end and $2.80 to the upside.

WTI futures have seemed to set a new temporary floor at the $79-$80 level, which it has failed to fall below ever since OPEC+ shocked the industry with an impromptu production cut last weekend. But the impact of the Cartel Surprise isn’t limited to the energy industry: US monetary policy will likely be impacted since energy prices make up 7.5% of the Consumer Price Index, which the Fed has been attempting to wrestle over the past year.

What might stoke the idea this latest move from OPEC+ is largely avaricious is looking at which countries won’t suffer a supply decrease. Saudi Arabia will supply several refiners in North Asia with their full contractual volumes in May, despite the 500mbpd production cut beginning next month. The official explanation is this will help stabilize the global oil market, however, after the cuts were announced, Saudi Aramco raised its official selling prices for its crude going to Asia in May.

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