Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil prices are weakening this morning. WTI (West Texas Intermediate) crude forward prices opened at $52.30/b today, up by $0.3 (0.58%) from yesterday’s opening price of $52.00/b. Prices since then have withdrawn to approximately $51.50/b. Gasoline and diesel forward prices also opened with gains, but forward prices for all three declined overnight and in early morning trading. U.S. oil inventories expanded once again, production estimates were raised by 200,000 barrels per day last week, and forecasts of 2019-2020 production were revised upward.

The Energy Information Administration (EIA) released official data on oil inventories yesterday. The EIA reported that U.S. crude oil inventories were drawn down by 2.683 million barrels (mmbbls) last week. This was more than countered by a 7.503-mmbbl addition to gasoline inventories and a 2.967-mmbbl addition to diesel inventories, for a net addition of 7.787 mmbbls. The drawdown from crude inventories exceeded the data presented by the American Petroleum Institute (API,) which earlier had reported that U.S. crude oil inventories were drawn down by only 0.65 mmbbls last week. The API also reported that gasoline inventories rose by 5.99 mmbbls and diesel inventories rose by 3.214 mmbbls., for a net addition of 8.644 mmbbls to stockpiles.

The EIA estimates that 2018 crude production averaged 10.9 mmbpd in 2018, up by 1.6 mmbpd from 2017. The EIA forecasts that production will rise to 12.1 mmbpd in 2019 and 12.9 mmbpd in 2020.

The Dow Jones opened nearly 95 points down this morning. Stock markets are expected to stall today, as worries resurface over the U.S.-China trade war. Preliminary meetings raised optimism about prospects for the upcoming higher-level meetings. However, the investigation into China’s Huawei Technologies reportedly is ramping up. Huawei Technologies is accused of stealing trade secrets from U.S. companies.