Energy Futures Slump Toward Weekly Loss on Weak Demand and Supply Risks

Gasoline led the downward movement during Friday’s session, with RBOB futures for March falling to $1.9033 per gallon, roughly 5 cents below the previous week's settlement. Ultra-low sulfur diesel followed a similar trajectory, with the front-month contract trading at $2.3880 per gallon. While intraday movements for West Texas Intermediate (WTI) and Brent crude remained narrow, WTI is currently on track for a notable 90-cent weekly drop.

Supply Pressures and Demand Headwinds

The bearish sentiment intensified following an Energy Information Administration (EIA) report that confirmed a 1.2 million barrel build in U.S. crude inventories. Data also showed that implied gasoline demand remains lackluster at 8.3 million barrels per day. Furthermore, a Reuters report indicated that OPEC and its allies might resume monthly production hikes in April, despite warnings from several agencies that global crude supply will outpace demand through 2027.

Geopolitical instability continues to act as a catalyst for market volatility. Traders are monitoring the status of nuclear enrichment talks between the U.S. and Iran, particularly as the U.S. dispatches naval forces to the Middle East. Analysts suggest that any potential conflict near the Strait of Hormuz would disrupt global oil movements and significantly impact pricing structures in the coming months.