Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil futures prices caved in over Thanksgiving week, crashing below the $51/b mark and coming close to falling below the $50/b barrier as well. Oil futures contracts seemed to join many consumer goods in offering a Black Friday sale. WTI (West Texas Intermediate) crude prices opened at $50.62/b today, a major drop of $4.04 (7.39%) from Friday’s opening price of $54.66/b. Prices are back to where they were approximately three years ago. Gasoline and diesel also collapsed. Last week ended seriously in the red. Markets today appear to be in the process of stabilizing, with stock markets recovering some of their recent losses.  

During the week ended November 23rd, WTI forward prices dropped by $6.61/b (11.6%,) falling from $57.03/b on Monday November 19th to $50.42/b on Friday, November 23rd. Gasoline futures prices opened at $1.5778/gallon on Monday, plummeting by 18.65 cents (11.8%) to end at $1.3913/gallon on Friday. Diesel futures prices opened at $2.0786/gallon on Monday, dropping by 20.24 cents (9.7%) to close at $1.8762/gallon on Friday.  

Wednesday’s price drop was moderated by the release of oil inventory data from the American Petroleum Institute (API,) showing a 1.545-million-barrel drawdown from U.S. crude inventories plus a significant draw from diesel inventories and only a small build in gasoline stocks. However, the downward slide resumed when the Energy Information Administration (EIA) released official statistics, contradicting the API’s numbers.  

The official EIA data reported a significant addition of 4.851 mmbbls to crude oil stocks. This was only partially leavened by drawdowns of 1.296 mmbbls from gasoline stocks plus a very small drawdown of 0.077 mmbbls from diesel stocks, adding to a net inventory addition of 3.479 mmbbls. This was the ninth consecutive week that crude oil inventories have grown. Over those nine weeks, 52.8 mmbbls of crude has flowed back into inventory, bringing U.S. stockpiles to 446.9 mmbbls. This is the highest level of the year, and the highest since the week of December 1st, 2017.