Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil futures prices are slumping again this morning, dipping below the $56/b mark. Yesterday brought a rally that kept prices above $57/b. WTI (West Texas Intermediate) crude prices opened at $57.39/b today, up by $0.67 (1.18%) from yesterday’s opening price of $56.72/b. This is the fourth session that WTI prices have risen, following the 12-day losing streak that led to last Wednesday’s collapse. Gasoline and diesel also opened with gains in today’s trading session. However, prices currently are heading down, following shakiness in global equities markets.

Last week brought a steep drop in oil and refined product forward prices. Hedge fund managers have exited all bullish positions in the futures market. Indeed, some hedge fund investors themselves may be looking for other types of investment vehicles, since the Tax Cuts and Jobs Act is repealing all miscellaneous itemized tax deductions, including deductions for hedge fund management fees and other partnership expenses. These fees can be huge, making hedge fund yields less attractive than less-volatile investments.

WTI crude prices over the past four market session settled in a new range of around $56-$57/b, but forward prices now are dipping below the $56/b level. Global economic concerns—a wide range of issues spanning the globe—are weighing on markets. The Dow Jones Industrial Average fell by over 395 points yesterday (1.56%) and markets opened lower today.