Fuels Market Watch 24

CRUDE

Over the past 24 hours, WTI (West Texas Intermediate) crude prices collapsed, opening below $67/b in today’s trading session. Diesel and gasoline prices followed crude down. Oil prices hit bottom by midday Wednesday, and they are slowly creeping back up.

The price drop occurred following the weekly release of bearish oil inventory data by the U.S. Energy Information Administration (EIA.) Last week, the EIA reported a crude stock build of 3.803 million barrels. This week, the American Petroleum Institute (API) forecast a large crude stock drawdown of 6 million barrels. However, the EIA reported a crude oil inventory reduction of only 1.351 million barrels. This crude stock drawdown was overwhelmed by additions to gasoline and diesel inventories. Gasoline inventories increased by 2.9 million barrels, and diesel inventories increased by 1.23 million barrels. The net was 2.779 million barrels of additional oil in storage.

The U.S.-China trade war also heated up as China launched 25% tariffs on a range of U.S. goods, including refined petroleum products. Notably, however, China left imports of U.S. crude oil off the list of targeted goods. China is heavily dependent on imported crude oil. Placing a tariff on supplies from the U.S. likely would be counterproductive to the economy. During the January-May 2018 period, China imported an average of nearly 350,000 barrels per day of U.S. crude oil, purchasing 21% of U.S. crude exports (which averaged approximately 1,676,700 barrels per day.) Chinese imports of U.S. crude are up from 223,700 barrels per day in 2017, which accounted for 20% of total U.S. crude exports.

WEST TEXAS INTERMEDIATE

WTI (West Texas Intermediate) crude prices opened on the NYMEX at $66.79/b today. Over the last 24-hour period from 9AM EST to 9AM EST, crude prices collapsed by $2.25/b. Prices currently are recovering slowly. The latest price is $67.24/b.

DIESEL

Diesel opened on the NYMEX at $2.1177/gallon today. Over the last 24-hour period from 9AM EST to 9AM EST, diesel prices dropped by 4.51 cents/gallon. Prices currently are recovering slightly. The latest price is $2.1221/gallon.

GASOLINE

Gasoline opened on the NYMEX at $2.0180 today. Over the last 24-hour period from 9AM EST to 9AM EST, gasoline prices plummeted by 7.21 cents/gallon (3.44%.) Prices currently are continuing to wane. The latest price is $2.0100/gallon.