Fuels Market Watch 24
Exclusive daily fuels market analysis by Dr. Nancy Yamaguchi.
FUEL MARKETS TODAY – Market Overview
Oil prices have dropped again, alongside another stock market drop. OPEC just announced a tentative agreement to cut production, which tempered the downward price movement. However, the agreement is not firm, and Russia has not yet announced commitment. WTI (West Texas Intermediate) crude forward prices opened at $52.93/b today, up by $0.34 (0.65%) from yesterday’s opening price of $52.59/b. Yesterday, markets were closed in honor of the memorial service for President George H.W. Bush. Gasoline and diesel futures prices also showed gains at market opening this morning, but they too dropped significantly in early morning trades. Currently, the oil complex is hovering, awaiting direction from OPEC and from the next set of weekly supply and demand data from the U.S. Energy Information Administration (EIA.)
Global equities markets continue in turmoil. Stocks collapsed on Tuesday, plateaued briefly, and are now heading down again. Asian and European equities dropped today, and U.S. markets just opened sharply lower, with the Dow Jones Industrial Average down by over 400 points. There are renewed concerns over the U.S.-China trade war, and whether the 90-day truce will result in true progress in the dispute. Relations became increasingly strained when the CFO of China’s Huawei Technologies Company, Meng Wanzhou, was arrested in Vancouver, Canada. She could face extradition to the U.S. over alleged violations of U.S. sanctions on Iran. She is the daughter of Huawei’s founder. The arrest took place the same day that President Donald Trump and President Xi Jinping met at the G20 summit in Buenos Aires.
Oil markets are awaiting additional direction from OPEC. The markets have built in at least some sort of production cut. Prior to the OPEC meeting today, Saudi Arabian Oil Minister Khalid al-Falih estimated that a cut of around 1.3 million barrels per day would be needed. Today, he diluted this to 1.0 mmbpd. OPEC is far from cohesive, with Iran refusing to participate, and Qatar resigning from the group. Russia has yet to issue a firm commitment. It will be easier to disappoint markets than to thrill them today.
Gasoline opened on the NYMEX at $1.4426/gallon today, a recovery of 1.7 cents (1.14%) from yesterday’s opening price of $1.4256 cents/gallon. Over the last 24-hour trading period from 9AM EST to 9AM EST, gasoline prices relapsed by 4.32 cents/gallon (2.99%.) Currently, gasoline prices have retreated the range of $1.41-$1.44/gallon. The latest price is $1.4306/gallon.
Diesel opened on the NYMEX at $1.8886/gallon today, a slight gain of 0.31 cents (0.16%) from yesterday’s opening price of $1.8855/gallon. Over the last 24-hour period from 9AM EST to 9AM EST, diesel prices dropped again by 4.96 cents/gallon (2.61%.) Currently, diesel prices have subsided to the range of $1.85-$1.87/gallon. The latest price is $1.8619/gallon.
WEST TEXAS INTERMEDIATE
WTI (West Texas Intermediate) crude prices opened at $52.93/b today, up slightly by $0.34 (0.65%) from yesterday’s opening price of $52.59/b. Over the last 24-hour period from 9AM EST to 9AM EST, crude futures dropped again by $2.16/b (4.05%.) Oil prices currently are hovering below $52/b, with downward movement paused but upward movement paused, awaiting news from OPEC and from the EIA. Prices are in the vicinity of $51.50/b-$52.00/b. The latest price is $51.87/b.