Fuels Market Watch 24

Exclusive daily fuels market analysis by Dr. Nancy Yamaguchi.

FUEL MARKETS TODAY – Market Overview

Crude oil prices are rising this morning, reversing yesterday’s decline and heading higher. WTI (West Texas Intermediate) crude forward prices opened at $52.47/b today, down by $0.19 (0.36%) from yesterday’s opening price of $52.66/b. Gasoline and diesel futures prices opened with losses. However, crude and product prices are now rising, based on news of major cuts in OPEC oil production and a potential compromise on U.S.-Mexico border security that may serve to avert another partial government shutdown. Market optimism also received a boost by potential progress in the U.S.-China trade war.

OPEC published its monthly data for January, showing a major cut of 797 thousand barrels per day (kbpd) below December’s production level. OPEC production was cut from 31,603 kbpd in December to 30,806 kbpd in January. A serious-minded Saudi Arabia made the largest cut, at 350 kbpd. It was followed by the UAE (a cut of 146 kbpd,) Kuwait (90 kbpd,) and Angola (75 kbpd.) Venezuela’s output already had been declining for internal reasons, and its production continued to fall by 59 kbpd in January. Venezuela’s output is expected to fall more dramatically in February as U.S. sanctions begin to bite. Production fell in all other OPEC countries except for Nigeria and Equatorial Guinea.

In the U.S., Congressional Democrats and Republicans reached a compromise agreement on U.S.-Mexico border security that includes $1.375 billion for more extensive barriers along the border. President Donald Trump is demanding $5.7 billion, as a start. He attended a rally in El Paso, Texas, yesterday and insisted “we’re building the wall anyway.” If he does not accept the compromise deal, he could launch another partial government shutdown on Friday. For the time being, however, there is a chance that the president will accept this amount and find other federal monies to start building the wall.

Market optimism also received a boost by potential progress in the U.S.-China trade war, with news of a possible extension of the March 1st deadline for negotiations.

GASOLINE

Gasoline opened on the NYMEX at $1.4208/gallon today, down by 2.08 cents (1.16%) from yesterday’s opening price of $1.4416 cents/gallon. Over the past 24 hours from 9AM EST to 9AM EST, gasoline prices rose by 1.19 cents (0.83%.) Prices currently are rising, trading in a range of $1.44-$1.47/gallon. The latest price is $1.4670/gallon.

 
DIESEL

Diesel opened on the NYMEX at $1.8958/gallon today, down by 1.42 cents (0.74%) from yesterday’s opening price of $1.91/gallon. Over the past 24 hours from 9AM EST to 9AM EST, diesel prices rose by 1.16 cents (0.61%.) Diesel prices currently are rising, trading in the range of $1.90-$1.94/gallon. The latest price is $1.9315/gallon.

 
WEST TEXAS INTERMEDIATE

WTI (West Texas Intermediate) crude forward prices opened at $52.47/b today, down by $0.19 (0.36%) from yesterday’s opening price of $52.66/b. Over the past 24 hours from 9AM EST to 9AM EST, WTI crude prices rose by $1.34 (2.56%.) Currently, prices are rising, regaining the $53/b level, and even approaching $54/b. The latest price is $53.98/b.