Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil prices are pulling back this morning, after remaining strong over the weekend. Markets were closed on Monday in observance of Martin Luther King Day. WTI (West Texas Intermediate) crude forward prices opened at $53.73/b today, up by $1.50 (2.87%) from Friday’s opening price of $52.23/b. Gasoline and diesel futures prices also opened with gains today. Crude and product prices all are easing this morning, as long-term economic and political problems dampen optimism.

Last week, oil prices ended solidly in the black. This was the third week in a row that prices rose. WTI crude prices opened on Monday at $51.73/b and ended on Friday at $53.80/b, a significant increase of $3.02 (5.9%) for the week. Gasoline prices opened on Monday at $1.408/gallon and closed Friday at $1.4528/gallon, a major increase of 8.35 cents (6.1%) for the week. Diesel prices opened on Monday at $1.8828/gallon and closed Friday at $1.916, up by 5.82 cents (3.1%) for the week.

Today’s pullback can be viewed as balancing the rapid increase in oil prices. Despite today’s price decline, the oil complex has staged a remarkable comeback over the past three weeks. The host of global economic and political problems are long term, however. Last week’s optimism was based partly on the prospect of making progress on the U.S.-China trade war. Yesterday, however, China reported its lowest annual growth in nearly thirty years. China also reported that falling factory orders indicated that economic activity and growth could decline further.

The International Monetary Fund (IMF) cut its forecast of 2019 global growth from 3.7% to 3.5%. The World Economic Forum is beginning in the Swiss town of Davos, but there will be some notable absences: U.S. President Trump, who is on day 32 of his federal government shutdown; U.K. Prime Minister Theresa May, who has made little headway on Brexit; France’s President Emmanuel Macron, who is dealing with domestic matters, including the “yellow vest” protesters; Canada’s Prime Minister Justin Trudeau, who faced criticism over the cost of his visit to Davos last year; India’s Prime Minister Narendra Modi, who is facing a difficult general election this spring; and Zimbabwe’s President, Emmerson Mnangagwa, who is coping with violent protests over fuel prices that caused at least a dozen fatalities last week.