Fuels Market Watch 24

Exclusive daily fuels market analysis by Dr. Nancy Yamaguchi.

FUEL MARKETS TODAY – Market Overview

Oil prices continue to retreat today, by now surrendering most of the gains achieved over the past month. WTI (West Texas Intermediate) crude prices in today’s trading session opened at $70.03, a drop of $2.14 from yesterday’s opening price of $72.17/b. WTI prices are continuing to languish, currently dropping below $69/b. Gasoline and diesel futures prices are falling, with gasoline prices dropping at the fastest rate.

The Energy Information Administration (EIA) released official statistics on U.S. supply and demand for the week ended October 12th. The data show a major addition of 6.49 million barrels (mmbbls) to crude oil inventories, partially counterbalanced by a stock drawdown of 2.016 mmbbls of gasoline and a stock drawdown of 0.827 mmbbls of diesel. The net addition to oil inventories was 3.647 mmbbls.

The official data paint a drastically different portrait than the one expected by the American Petroleum Institute (API.) The API earlier had reported across-the-board drawdowns of 2.13 mmbbls of crude, 3.4 mmbbls of gasoline, and 0.246 mmbbls of diesel, for a total net draw of 5.776 mmbbls. This was a very bullish report, suggesting strong demand.

Stock markets fell yesterday when the Fed released the minutes of its September meeting. In September, the Fed raised interest rates for the third time this year. The minutes noted that some members believed that interest rates would eventually need to “become more restrictive” to prevent inflation from climbing too high. In general, higher interest rates make investors less inclined to “buy the dip” when stock prices fall. Ultimately, this moderates stock appreciation.

GASOLINE

Gasoline opened on the NYMEX at $1.9253 today, a sharp drop of 6.01 cent (3.02%) from yesterday’s opening. Over the last 24-hour trading period from 9AM EST to 9AM EST, gasoline prices plummeted by 7.9 cents/gallon (4.01%.) Gasoline prices currently are continuing to fall. The latest price is $1.8859/gallon.

DIESEL

Diesel opened on the NYMEX at $2.3152/gallon today, a drop of 2.9 cents (1.23%) from yesterday’s opening. Over the last 24-hour period from 9AM EST to 9AM EST, diesel prices dropped by 3.97 cents/gallon (1.7%.) Currently, diesel prices are trending down. The latest price is $2.2867/gallon.

WEST TEXAS INTERMEDIATE

WTI (West Texas Intermediate) crude prices opened on today’s NYMEX session at $70.03/b, down by $2.14 (2.97%) from yesterday’s opening price of $72.17/b. Over the last 24-hour period from 9AM EST to 9AM EST, crude prices dropped by $2.50 (3.5%.) Crude prices are continuing to retreat currently. The latest price is $68.68/b.