In our last News Flash entitled “Increased Volatility Ahead” we concluded by stating – “we suspect that in the coming weeks/months we will see an elevated level of volatility as the market oscillates between bearish fundamentals and continued news flow from OPEC to support the current price”. At the time we released our note, WTI and Brent were just below $55 and $57 per barrel respectively – riding a wave of optimism from the recently enacted OPEC production cuts. In March, prices fell roughly 15 percent as the market struggled to understand why inventories were not declining as initially forecast. In April, prices rebounded erasing most of their losses as OPEC members started talking about an extension to the agreement. Yesterday, prices fell sharply after the release of US inventory data showing crude production continued to climb, inventories declined slightly from record levels and gasoline stocks unexpectedly increased. It seems heightened volatility will continue to plague the market until the next OPEC meeting at the close of May.