Fuels Market Watch 24

Exclusive daily fuels market analysis by Dr. Nancy Yamaguchi.

FUEL MARKETS TODAY – Market Overview

Oil prices have continued to recover as supply reductions appear to be in the works from the OPEC-NOPEC coalition, and Canadian supplies also will be reduced. WTI (West Texas Intermediate) crude forward prices opened at $53.13/b today, up by $0.68 (1.3%) from yesterday’s opening price of $52.45/b. Gasoline and diesel futures prices also opened with gains this morning. All prices currently are stronger this morning than they were last night, but following a surge in buying, the upward movement now has leveled off.

Last week, crude oil futures prices finally broke a 7-week downhill slide. Gasoline prices also finished in the black, though diesel prices remained in the red. News about a 90-day truce in the U.S.-China trade war boosted optimism in the global economy. But just as swiftly, White House officials began to hem and haw about details, including whether the truce began on December 1st or January 1st. The initial source of news was a tweet from President Donald Trump, touting his victory, but China has been silent.

Still searching for positive news, the markets shifted their attention to the prospect that OPEC and non-OPEC participants in the production cut agreement will reduce output again. Saudi Arabian Oil Minister Khalid Al-Falih has stated that the market needs a 1.3-million barrel-per-day reduction in supply, but that Saudi Arabia would not do this alone. President Vladimir Putin announced that he and Saudi Arabian Crown Prince Mohammed bin Salman had agreed to extend their deal to limit production. OPEC will meet on December 6th in Vienna.

In a blow to OPEC unity, however, Qatar announced that it would leave the group as of January 1st. Qatar was a participant in the production cut agreement, and it adhered closely to its production ceiling. Qatar diplomatically cited the desire to focus more on its natural gas industry rather than on oil. But Saudi Arabia declared that Qatar was supporting terrorist activities, and it launched a blockade against Qatar in the summer of 2017. This cut off Qatar’s land-based transport routes. Qatar still managed to export products, defying Saudi Arabia.

GASOLINE

Gasoline opened on the NYMEX at $1.4392/gallon today, an increase of 2.66 cents (1.8%) from yesterday’s opening price of $1.4126 cents/gallon. Over the last 24-hour trading period from 9AM EST to 9AM EST, gasoline prices rose by 0.51 cents/gallon (0.35%.) Currently, gasoline prices are mainly staying in the range of $1.44-$1.47/gallon. The latest price is $1.4516/gallon.

DIESEL

Diesel opened on the NYMEX at $1.8931/gallon today, a gain of 5.06 cents (2.65%) from yesterday’s opening price of $1.8425/gallon. Over the last 24-hour period from 9AM EST to 9AM EST, diesel prices rose by 3.31 cents/gallon (1.75%.) Currently, diesel prices have strengthened in the zone of $1.91-$1.93/gallon. The latest price is $1.9127/gallon.

WEST TEXAS INTERMEDIATE

WTI (West Texas Intermediate) crude prices opened at $53.13/b today, a recovery of $0.68 (1.3%) from yesterday’s opening price of $52.45/b. Over the last 24-hour period from 9AM EST to 9AM EST, crude futures increased by $0.35/b (0.65%.) After the surge in buying, crude prices now appear to be stabilizing in the vicinity of $53.25/b-$53.75/b. The latest price is $53.13/b.