Commodity Blog

Oil withdrew from its three-year high today, following a Tweet from Trump that played down the possibility of immediate action against Syria. Despite slight dips, the commodity retained a lot of the gains it made on the geopolitical uncertainty of the past week. OPEC also announced that its production had fallen in March, but total oil production was up as a result of increased output from non-OPEC countries.

Oil reached its highest price since December 2014 on Wednesday following the threat of action against Syria and the likely involvement of Russia in any retaliatory action. The rise came despite the EIA announcing a rise of 3.3 million barrels in US crude stockpile; an announcement that would usually cause a dip in oil prices. The geopolitical premium far outweighed the weekly announcement.

On Wednesday, Trump had said that US missiles would be “coming, nice and new and ‘smart!’”. However, he seemed to backtrack today, tweeting that he had “never said when an attack on Syria would take place. Could be very soon or not so soon at all!” His words would indicate that the USA still intends to attack al-Assad’s regime, but the market has clearly taken this as a sign that an attack may not be as imminent as initially thought.

Also on Thursday, OPEC’s oil report showed that output declined by 201,000 barrels a day in March. However, taking non-OPEC producers into account, there was still a global increase of 180,000 barrels a day last month.

With mixed messages coming from Trump and from oil production reports, the market withdrew a little from Wednesday’s highs. WTI crude was trading at $66.71, representing a 0.16% decline on Wednesday’s oil prices, while Brent crude slipped 0.5% down to $71.70 a barrel at 17:15 GMT.

If you have any questions and comments on commodities today, use the form below to reply.