On Friday, the price of oil has dropped somewhat, but it is still trading within its previous ranges and the market participants aren't showing much conviction in their positions. Although they were down just about $2.0 on the day, front-month WTI futures were trading at the $110 per barrel mark at the time of this writing. Despite this, they were still trading almost $5.0 higher than Thursday's lows, which were around $105. After failing to test late-March highs in the $116s in the first part of the week before coming under pressure amid a sharp deterioration in the sentiment surrounding global equity markets on Wednesday, it appears likely that WTI will close out the week nearly bang on flat. This is because WTI failed to test late-March highs in the $116s in the first part of the week.
Because there were no big new fundamental events this week that were important to the price of crude oil, it is not too unexpected to see WTI trading around the center of this week's range of approximately $105-115. To begin, there hasn't been any new information surrounding the potential embargo on oil imports from Russia by the European Union. The plan has not yet received the majority approval from EU member states that is required for it to go into force, and Hungary is still holding out, but analysts anticipate that an agreement might be achieved at a summit of the EU council at the end of this month.
This lack of progress, along with this week's fall in global stocks as investors fretted about aggressive central bank (Fed) tightening amid sky-high inflation despite slowing global growth, prevented WTI from surpassing the mid-$110s range. But additional evidence of OPEC+'s production difficulties (as smaller nations continue to underproduce relative to their output target and Russian output drops), easing China's lockdowns, the continued absence of any progress towards oil export sanction relief on Iran or Venezuela, and a weaker US dollar all helped WTI find plenty of buyers as it dropped back into the mid-$100s.
Data collected this week indicated that despite recent increases in the price of fuel (and overall inflation), consumer expenditure in the United States is maintaining steady. The numbers for April Retail Sales that were released on Tuesday were higher than expected, and the weekly US inventory statistics that were released on Wednesday indicated a further reduction in crude oil stockpiles and revealed that US refiners were operating at full capacity. In addition, information that was released by the Federal Highway Administration on Friday demonstrated that the number of vehicle miles driven in the United States is still increasing, which suggests that there has not been a significant reduction in demand as of yet.