An attempted drone strike on Saudi Arabia’s Ras Tanura export terminal was thwarted when Saudi Arabian forces shot down the drown but it was enough to give the oil an incredible ride.

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Global oil prices that are already be supported by OPEC Plus's decision last week to roll over production cuts, were already trading at the highest since January of 2020 and extended those gains with a pop and then a drop. There was no damage or loss of life from the attack and the oil market calmed yet the underlying bullish factors still exist. Yet sometimes when we have an event like the failed strike on the Saudi facility, it could add to speculative volatility.

With stimulus hopes rising and the re-opening trade underway, the crude oil market should continue to get a bid. We are seeing from an oil demand standpoint that things are already on track to see demand exceed pre covid levels later this year. In the U.S., gasoline demand is starting to snap back. My buddy Patrick De Hann at Gas Buddy says that according to pay with GasBuddy data, U.S. gasoline demand jumped 5.9% for the week ending Saturday, pushing demand to the highest since the pandemic started for the second straight week. Now with the possibility of more stimulus checks getting mailed out, that number could go higher.

Oil Inventories should start to fall again this week with an expected 4-million-barrel drop. Gasoline supplies should also fall by 2.0 million barrels and distillate by 2.5. Refinery runs should uptick by 3.0. We have predicted a massive tightening supply and that has come..

Natural gas is holding up well. Andrew Weissman of EBW Analytics says that despite a huge bearish storage miss last week, with EIA reporting a 98 Bcf draw (35-40 Bcf below most estimates) and forecasts for much warmer-than-normal weather this week, natural gas largely held its ground, with the April contract suffering only modest losses. This week’s price movements, like last week’s, will depend heavily on near-term weather forecast shifts. Mid-day model runs call for slightly cooler-than-normal weather during the 6–15-day period. If this cooler trend persists, natural gas prices could stabilize or post small gains.