Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil prices are relaxing this morning, backing away from the $54+/b highs hit yesterday and maintained overnight. WTI (West Texas Intermediate) crude forward prices opened at $53.96/b today, up by $0.61 (1.14%) from yesterday’s opening price of $53.35/b. Prices then rose above $54/b, but they are subsiding in early morning trading. Gasoline and diesel futures prices also opened with gains today, and some of these gains are being given back in apparent proft-taking.

The Energy Information Administration (EIA) released official statistics on U.S. oil supply for the week ended February 8^th. The EIA reported across-the-board additions to oil inventories: 3.633 million barrels (mmbbls) to crude oil stockpiles, 0.408 mmbbls added to gasoline inventories, and 1.187 mmbbls added to diesel inventories. The total was 5.228 mmbbls of added inventory. The data differed greatly from the earlier information provided by the American Petroleum Institute (API.) The API reported a drawdown of 0.998 mmbbls from U.S. crude oil inventories, a drawdown of 2.481 mmbbls from diesel inventories and a build of 0.746 mmbbls in gasoline inventories.

The EIA data dampened the upward movement in oil prices (prices had been hitting three-month highs,) but other factors also are at play. The U.S. Department of Commerce just reported that retail sales dropped by 1.2% in December, after revising the November data to show an uptick of 0.1%. Economists had expected December retail sales to rise by 0.2%. The unexpected drop supports data recently released by the University of Michigan, who reported their index of consumer confidence dropped from 98.3 in December 2018 to 91.2 in January 2019. Moreover, the Bureau of Labor Statistics reported that jobless claims unexpectedly rose during the week ended February 9^th.