Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

The oil complex followed equities markets in a downward spiral yesterday, following heavy losses on Tuesday. This morning is expected to bring at least a partial rebound, both in the stock market and to oil prices. WTI (West Texas Intermediate) crude prices in today’s trading session opened at $66.36, up slightly by $0.19 from yesterday’s opening price of $66.17/b. Gasoline and diesel futures prices opened lower this morning. Diesel prices show signs of creeping back up, though gasoline prices remain depressed.

The Energy Information Administration (EIA) released official statistics on weekly oil supply and demand yesterday. The EIA reported an addition of 6.346 million barrels (mmbbls) to crude oil inventories. This was more than countered by inventory drawdowns of 4.826 mmbbls of gasoline and 2.262 mmbbls of diesel, adding to a net drawdown of 0.742 mmbbls from stockpiles. Prior to this, prices had plummeted when the American Petroleum Institute (API) reported a massive addition of 9.88 mmbbls to crude oil inventories. The EIA data shows a much better balance of supply and demand.

The EIA report was unable to counter the collapse of oil prices that followed the collapse of equities markets. The Dow Jones sank by over 600 points yesterday, with poor earnings reports prompting a major selloff. Markets already had been grappling with large-scale concerns over downward revisions of global growth, The U.S.-China trade war, Brexit, Italy’s budget crisis, and rising interest rates. This morning, however, a rebound is predicted in the stock market, with some positive earnings reports recently released and anticipated. Currently, oil prices have bottomed out, and they are inching back up.