Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil prices are strengthening this morning, recovering after a small downturn yesterday. WTI (West Texas Intermediate) crude forward prices opened at $52.23/b today, down slightly by $0.07 (0.13%) from yesterday’s opening price of $52.30/b. Prices since then have gradually climbed back above $52.50/b. Diesel forward prices also opened slightly down, then recouped the loss. Gasoline forward prices are continuing the rise for the third session in a row. There are reports that the U.S. is planning to lift tariffs on Chinese imports. They have been dismissed as premature rumors, but the desire to believe them is buoying markets today.

The upward momentum in oil prices is transforming into an up-and-down search for equilibrium. The oil complex appears ready to end this week in the black, for the third week in a row. After prices collapsed to multi-year lows around the Christmas holiday, oil prices have staged a sustained comeback. As of the time of this writing, WTI crude prices are up by $2.02 (4.0%) for the week. Gasoline prices are up by 6.96 cents (5.1%) for the week. Diesel prices are up by 3.56 cents (1.9%) for the week.

Oil and equities values are being supported by reports that the U.S. is considering the elimination of tariffs on Chinese goods. U.S. officials denied the rumors as premature, given that the U.S.-China meetings will not be held until January 30th. Nonetheless, the idea has been given credibility because of its source, the Wall Street Journal. The WSJ reported that U.S. Treasury Secretary Steven Mnuchin discussed lifting some, or even all, tariffs on Chinese imports during the January 30th meeting. The U.S. stock market rose upon the report, with the Dow Jones Industrial Average gaining nearly 163 points. If the reports are wishful thinking, the majority of investors appear wishful.