Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil futures prices are stabilizing after the Thanksgiving week crash. WTI (West Texas Intermediate) crude prices opened at $51.54/b today, a recovery of $0.92 (1.82%) from yesterday’s opening price of $50.62/b. Yesterday’s drop of $4.04/b was the largest daily drop of the year. Gasoline and diesel futures prices also recouped some of their losses at today’s opening. However, the market has been unable to make any significant gains in this morning’s early trading.

The oil complex continues to languish, as markets await guidance from two key meetings:

First, the Group of 20 (G20) meeting in Buenos Aires, Argentina, will take place on November 30th-December 1st. The U.S.-China trade war is viewed as the most critical topic. U.S. President Trump continues to speak aggressively on the issue, making a resolution appear unlikely. The president also this morning dropped a bomb on U.K. Prime Minister Theresa May’s Brexit proposal, saying that the Brexit deal would make it impossible for the U.K. to agree upon a trade deal with the U.S. The global oil supply-demand balance is also expected to be a discussion topic, with the top three crude producers U.S., Russia, and Saudi Arabia all in attendance.

Second, OPEC will hold its annual meeting on December 6th at its headquarters in Vienna, Austria. Saudi Arabia has made several statements about the need to restrain output. There is some support among the participants in the OPEC-NOPEC production cut agreement, and some sort of action is likely. Without a resumption of significant cuts, global inventories could swell once again, placing additional pressure on prices—perhaps undoing the efforts of the past two years.