US oil up 5% to start the quarter.
Levered longs in crude oil could take a hefty profit on Day 1 of the second quarter and close the books. WTI crude is up $2.78 to $50.39 on signs of slowing production in the US and signs of unease in Iran talks.
The focus on the EIA weekly storage data is generally supplies but the report also contains production figures and showed US outpul fell 36K barrels per day last week to 9.36 million in the first decline since January. The thinking is that US production may have crested at 9.42m bpd in late March.
Active rigs have fallen dramatically but there's a substantial lag between when a well is drilled and when the pumps run dry.
The looming factor is geopolitics as Iran negotiations continue to be extended. Oil just hit a fresh session high after a White House spokesman said that gaps still remain in talks with Iran. Talks have been extended for two days beyond the self-imposed March 30 deadline but the market is beginning to grow uneasy.
Germany's Steinmeier said proposals are due in the hours ahead and that officials will remain for another night. However, he conceded that talks could fall apart at any time.
Technically, it's a hefty positive day for crude but it doesn't change the underlying ranges unless the area around $52 is breached. Fundamentally, it's maintenance season for US refineries and that means storage capacity will be tested to the max in April.
