Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil futures prices continued to slide yesterday, crashing below the $54/b mark. WTI (West Texas Intermediate) crude prices opened at $53.39/b today, a major drop of $4.00 (6.97%) from yesterday’s opening price of $57.39/b. Prices this low have not been common since the summer of 2016, nearly two and a half years ago. Gasoline and diesel opened with significant losses in today’s trading session. Prices currently are stabilizing at new lows, with a slow upward movement.

Moving into the Thanksgiving holiday, trading is often subdued. Markets will be closed tomorrow and will close early on Friday. Oil prices and the stock market appear to be stabilizing after another sharp drop yesterday. Analysts expect a small bounce-back in stock markets today.

The collapse in oil prices was slowed by the release of oil inventory data from the American Petroleum Institute (API.) The API reported that U.S. crude inventories were drawn down by 1.545 million barrels (mmbbls) during the week ended November 16^th. The API reported a build of 0.706 mmbbls of gasoline, and a draw of 1.832 mmbbls from diesel inventories. The net effect was a drawdown of 2.671 mmbbls from inventory.

The Energy Information Administration (EIA) will release official statistics later today. If the API is correct, it will be the first drawdown of crude oil stocks in eight weeks. Over those eight weeks, 47.9 mmbbls of crude has flowed back into inventory, bringing U.S. stockpiles to nearly 442.1 mmbbls. This is the highest level of the year, and the highest since the week of December 8^th, 2017. Surveys of market experts generally concur that the EIA data will show yet another inventory build, contrary to the API’s assessment, so the EIA data release will be awaited with a greater-than-average level of curiosity.