Risk level: Yellow - Elevated

RED: Severe (+/- 4%) ORANGE: High (+/- 2%)  YELLOW: Elevated (+/- 1%)  BLUE: Guarded (+/- ½%)

We see some moderating trends in the risk premium for crude oil prices, though the line should still hold Brent crude oil in the low $70 per barrel range.

Fundamentals drove most of the rally in crude oil prices, with the U.S. Energy Information Agency reporting a drain on domestic inventories even as production continues to grow. Higher refinery runs and reduced imports contributed to the draw. By Friday, Schlumberger Chairman and CEO Paal Kibsgaard said global stocks weren't building in the first quarter and the oil market was clearly balanced.

But then U.S. President Donald Trump said the price of oil was too high, and artificially so, and Brent tanked for most of the morning before recovering ground by the close. For the week, however, oil prices were up roughly 3 percent, in line with our forecast from last week.

In Saudi Arabia, members of a committee monitoring the agreement said OECD commercial stocks declined 300 million barrels from their July 2016 levels, though more work was needed as inventories were still above the mark before the price of crude oil dropped below $30 per barrel. That would indicate sustained commitment with the agreement, though Kibsgaard cast a cloud over diminishing supply-side pressures by expressing concern about upstream weakness in the face of an "impending deficit" in crude.

On risk factors, North Korean leader Kim Jong Un declared victory while at the same time lauding a "fresh climate of détente and peace" on the Korean peninsula. Since the Winter Games, Kim's rhetoric has permeated more deeply into the international conversation in ways that would seem to thaw regional tensions. Ahead of possible direct talks with Trump, a first with a sitting U.S. president, he said Pyongyang would no longer need to test nuclear devices, intermediate or intercontinental missiles. Why? Because he sees North Korea as a nuclear-weapons state, putting the isolated regime in the same arena as the world's superpowers. The international relations theorist Hans Morgenthau said once that a state is a superpower if it's treated like one and clearly Kim feels his meetings in Washington mean that for him.

At the height of the tensions last year, when Kim was called Rocket Man by President Trump, the price of crude oil jumped more than 2 percent. "Détente and peace" may carry uncomfortable nuclear undertones in that North Korea is unlikely to denuclearize, but it beats trading insults with a finger on the button.

Meanwhile, some recessionary bells may be ringing for the world's leading economies. International Monetary Fund managers last week spent most of their Spring Meeting in Washington warning that protectionism could undermine the growth that's been obvious over the last few years. Trump's message to OPEC last week may have indicated a sign that consumers are getting squeezed by higher oil prices. Temporary tax relief for American consumers is going in the gas tank now, wage growth is lackluster and, by the IMF's read, most people aren't enjoying the benefits of economic growth. That means that, while supply-side pressures may be fading, demand could also weaken.

With a risk premium fading on signs of nuclear de-escalation, the trend for the price of crude oil could cool off ahead of the May decision from Washington on the Iranian nuclear deal. We give the market a code yellow as we expect the price for oil to search for direction in the coming sessions.