Fuels Market Watch 24

Exclusive daily fuels market analysis by Dr. Nancy Yamaguchi.

FUEL MARKETS TODAY – Market Overview

Crude oil prices dropped sharply yesterday. WTI (West Texas Intermediate) crude prices in today’s trading session opened at $61.74, a drop of $0.96 from yesterday’s opening price of $62.70/b. This was the seventh day in a row that crude prices have fallen. WTI futures prices have not opened at such a low level since April. Gasoline and diesel futures prices opened modestly lower in this session. All are trending back up today in early trading.

The U.S. midterm election results came in as expected: Democrats won a majority in the House, while Republicans retained control of the Senate. Markets appeared reassured, the conventional wisdom being that there will be some continuity of Executive Branch programs, but not without proper checks and balances.

Oil prices collapsed yesterday upon official announcement of the eight countries receiving exemptions from the sanctions on Iran: China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey. These countries reportedly accounted for 80% of Iran’s oil exports last year, leaving investors to wonder how much Iranian oil will return to the market in December, and during the first months of 2019.

Exerting even more downward pressure on prices: the American Petroleum Institute (API) released its weekly data on U.S. oil inventories, reporting a stock buildup of 7.8 million barrels (mmbbls). The API reported a 1.2-mmbbl drawdown of gasoline inventories and a 3.6-mmbbl drawdown of diesel stocks. The net effect was a 3-mmbbl addition to inventories. The Energy Information Administration (EIA) will release official statistics later today.

GASOLINE

Gasoline opened on the NYMEX at $1.6779/gallon today, a small decline of 0.04 cents (0.24%) below yesterday’s opening price of $1.6819/gallon. Over the last 24-hour trading period from 9AM EST to 9AM EST, gasoline prices edged down slightly by 0.06 cents/gallon (0.04%.) Currently, gasoline prices have recovered some of the loss, and they appear to be stabilizing in the range of $1.68-$1.70/gallon. The latest price is $1.6942/gallon.

DIESEL

Diesel opened on the NYMEX at $2.1824/gallon today, slightly down by 0.19 cents (0.09%) from yesterday’s opening. Over the last 24-hour period from 9AM EST to 9AM EST, diesel prices recovered by 0.97 cents/gallon (0.92%.) Currently, diesel prices have recovered the $2.20/gallon level and appear to be stabilizing. The latest price is $2.2210/gallon.

WEST TEXAS INTERMEDIATE

WTI (West Texas Intermediate) crude prices opened on today’s NYMEX session at $61.74, down by $0.96 (1.53%) from yesterday’s opening price of $62.70/b. Over the last 24-hour period from 9AM EST to 9AM EST, crude prices fell by $0.51/b (0.81%.) Currently, crude prices have climbed back above $62/b, and they are in the range of $62.25-$62.75/b. The latest price is $62.53/b.