June WTI crude oil (CLM24) this morning is down -0.50 (-0.59%), and May RBOB gasoline (RBK24) is down -1.79 (-0.66%).

Crude and gasoline prices this morning are moderately lower on energy demand concerns after US Q1 GDP growth rose less than expected.  Losses in crude are limited after the dollar index fell to a 1-1/2 week low.  Crude also has carryover support from Wednesday's weekly report from the EIA, which showed that crude inventories unexpectedly declined.

Today's US economic news was mixed for energy demand and crude prices.  On the negative side, US Q1 GDP was revised downward to 1.6% (q/q annualized) from 3.4%, weaker than expectations of 2.5%, as Q1 personal consumption was revised lower to 2.5% from 3.3%, weaker than expectations of 3.0%.  Conversely, US weekly initial unemployment claims unexpectedly fell -5,000 to a 2-month low of 207,000, showing a stronger labor market than expectations of an increase to 215,000.

Reduced crude demand in India, the world's third-largest crude consumer, is negative for oil prices after India's March oil demand fell -0.6% y/y to 21.09 MMT.

Crude has support from the recent Ukrainian drone attacks on Russian refineries that damaged several Russian oil processing facilities, limiting Russia's fuel exporting capacity.  Russia's fuel exports in the week to April 21 fell by -500,000 bpd from the prior week to 3.45 million bpd.  JPMorgan Chase said it sees 900,000 bpd of Russian refinery capacity that could be offline "for several weeks if not months" from the attacks, adding $4 a barrel of risk premium to oil prices.

Crude prices have support from April 3 when OPEC+, at its monthly meeting, did not recommend any changes to their existing crude output cuts, which kept about 2 million bpd of production cuts in place until the end of June.  However, OPEC crude production in March rose +10,000 bpd to 26.860 million bpd, a bearish factor for oil prices as Iraq and UAE continue to pump above their production quotas.  

A decrease in crude in floating storage is bullish for prices.  Monday's weekly data from Vortexa showed that the amount of crude oil held worldwide on tankers that have been stationary for at least a week fell -18% w/w to 75.45 million bbl as of April 19.

Crude prices have underlying support from the Israel-Hamas war and concern that the war might spread to Hezbollah in Lebanon.  Also, attacks on commercial shipping in the Red Sea by Iran-backed Houthi rebels have forced shippers to divert shipments around the southern tip of Africa instead of going through the Red Sea, disrupting global crude oil supplies.

Wednesday's EIA report showed that (1) US crude oil inventories as of April 19 were -3.4% below the seasonal 5-year average, (2) gasoline inventories were -3.6% below the seasonal 5-year average, and (3) distillate inventories were -6.8% below the 5-year seasonal average.  US crude oil production in the week ending April 19 was unchanged w/w at 13.1 million bpd, below the recent record high of 13.3 million bpd.

Baker Hughes reported last Friday that active US oil rigs in the week ended April 19 rose by +5 rigs to a 7-month high of 511 rigs, moderately above the 2-year low of 494 rigs posted on November 10.  The number of US oil rigs has fallen over the past year from the 4-year high of 627 rigs posted in December 2022.
 

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