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Almost every Easter holiday gasoline price and oil prices surge but this year there’s more behind the rally than meets the eye.

The Keystone Pipeline experienced a shutdown on Tuesday morning due to a rupture in North Dakota. This event halted the delivery of crude oil from Canada to refineries in the U.S.  and this helped add to the cost of oil and gas, but those prices are coming back down today.

There are concerns about trade wars, reduced growth expectations from the International Monetary Fund, ongoing talks between the USA and Iran on their nuclear program, and threats from China. Following the Easter surge, prices are declining as China warns it will retaliate against countries that make deals with the US harming Beijing’s interests. Initially seeking allies against Trump’s tariffs, China now resorts to threats for non-compliance.

President Trump has been engaging with other countries to discuss trade policy, focusing on issues related to China’s practices. According to the BBC, the Trump administration has initiated discussions with trading partners about tariffs. A Japanese delegation visited Washington last week, and South Korea is scheduled to begin negotiations this week regarding trade and addressing China’s trade practices.

China has expressed concerns about countries cooperating with the United States, emphasizing its role as an exporting nation. If China wants other countries to buy its goods, it may need to consider the implications of its trade strategies.

Post-holiday setbacks depend on stock market stability. If stocks recover, oil products like gasoline and diesel will likely follow.

Another important factor to monitor today is the US dollar. The dollar is experiencing significant depreciation this morning as foreign currencies gain strength. Traders are seeking refuge in the Japanese yen, gold, and silver. Notably, copper is increasing despite concerns regarding the China-U.S. trade war.

US oil demand averaged 19.5 million barrels per day last month, down 1.7% from the same period last year. Over the past four weeks:

• Motor gasoline averaged 8.5 million barrels per day, down 3.4%.
• Distillate fuel averaged 3.8 million barrels per day, up 7.1%.
• Jet fuel was up 9.1%.

Natural gas prices are falling. EBW noted that the May contract dropped below last week’s lows, indicating a search for buyers. The 200-day moving average at $3.21/MMBtu offers support, but deeper losses may occur. Heating demand could drop by 8 Bcf/d next week, causing large injections into late April. There’s a disconnect between current price weakness and long-term supply risks.

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