Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil prices today remain subdued, continuing to recede for the second day following their sustained upward streak. WTI (West Texas Intermediate) crude forward prices opened at $50.78/b today, down by $0.95 (1.84%) from yesterday’s opening price of $51.73/b. Last week, crude oil reclaimed highs of $52-$53/b, but prices began to subside on Friday. Gasoline and diesel forward prices also opened with losses today. Crude and product prices are trading up and down today, awaiting guidance. Markets are mixed, with the U.S. government shutdown muddying the market outlook.

The U.S. federal government is in day 25 of shutdown, and U.S. President Donald Trump says he will not sign any measures for stopgap funding unless they include funds for his border wall. Historically, a short shutdown can have implications that are relatively minor. But a long shutdown gets exponentially worse, causing social, economic and environmental problems that grow increasingly severe. Delta Airlines, for example, reports that the shutdown will cost it $25 million this month, and that spotty security allowed a passenger to get through security with a gun. National parks are overflowing with garbage and human waste, and vandals have even killed some iconic Joshua trees in the Joshua Tree National Park.

The overall picture is of a U.S. so badly led that global markets are looking elsewhere for positive signals today. China, for example, is responding quickly to a major slowdown in its imports and exports. The Chinese government pledged to keep monetary policy flexible and to improve access to financing for businesses. Economic advisors believe that Chinese tax cuts will stimulate GDP growth. Chinese company shares rose on the announcement, and also on hopes that the Chinese leadership will work harder to resolve trade disputes with the U.S. later this month. Markets also await news from the American Petroleum Institute on U.S. oil stockpiles, which are expected to show a drawdown from crude inventories and a build in product inventories.