Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

The oil complex crept back up yesterday, but prices this morning are languishing, in line with stock market woes and fears that global growth will slow. WTI (West Texas Intermediate) crude prices in today’s trading session opened at $66.95, up by $0.59 from yesterday’s opening price of $66.36/b. Most of the gain has been handed back. Gasoline and diesel futures prices also opened higher this morning, though gasoline prices are now heading back down. Oil prices have recovered some of their mid-week losses, but the week is headed for a finish in the red.

The U.S. Department of Commerce has just released its first estimate of third quarter GDP growth, estimated at a 3.5% annualized rate. Last quarter’s GDP growth rate had been a very strong 4.2%, and this quarter’s growth had been expected to cool to 3.3%. The stronger-than-expected growth was attributed to strong consumer spending and a jump in inventory investment, as companies rushed to purchase essential goods prior to the launching of tariffs. Farmers also front-loaded soybean sales to China prior to tariffs setting in in July, and soybean exports have dropped since then.

This week has been a difficult one for global equities. A host of U.S. companies filed their quarterly earnings reports, and although there were bright spots, many heavyweight stocks performed below expectations. Investors pulled back from the tech sector, including the FANG group–Facebook, Amazon, Netflix and Google (now Alphabet). U.S. stock index futures were down this morning, ahead of global market openings and the release of third quarter U.S. GDP data. With GDP growth exceeding forecasts, however, a bounce-back is possible.