Fuels Market Watch 24

Exclusive daily fuels market analysis by Dr. Nancy Yamaguchi.

FUEL MARKETS TODAY – Market Overview

Crude oil prices are hovering this morning, working to hold gains after vaulting past the $57/b level yesterday. WTI (West Texas Intermediate) crude forward prices opened at $57.24/b today, up by $1.30 (2.32%) from yesterday’s opening price of $55.94/b. Gasoline and diesel futures prices also opened with strong gains. Prices jumped yesterday upon reports that the U.S. and China have begun to outline commitments in principle on key issues in the seven-month trade dispute, potentially the most significant progress yet noted. Oil prices also received support from better-than-expected news about U.S. oil inventories. This morning, prices are hovering, working to hold some gains and awaiting market direction. This will include official weekly statistics from the Energy Information Administration.

Negotiators from the U.S. and China are in the process of penning memoranda of understanding on key issues forming the trade dispute. As these are concluded, they will form a basis for any final deal. An extension of the March 1st deadline is likely. Markets jumped upon this news, many seeing it as the most concrete sign of progress to date. Some believe that it is too early for such optimism, however. The U.S.-China dispute may be joined by an escalation of trade disputes between the U.S. and Europe, with the Trump administration considering punitive tariffs on European automobiles.

Yesterday, the American Petroleum Institute issued its report on U.S. oil inventories. The API reported an addition of 1.26 million barrels (mmbbls,) to crude inventories. While inventory builds are typically bearish for prices, the API numbers were less than half of what was expected by industry experts. The API also reported a larger-than-expected drawdown of 1.55 mmbbls from gasoline inventories and a smaller-than expected drawdown of 0.758 mmbbls from diesel inventories. The net was a drawdown of 1.048 mmbbls from inventories. The consensus industry expectation is a stock build of 1.039 mmbbls. Prices rose on the news. The Energy Information Administration (EIA) will release official statistics later today.

GASOLINE

Gasoline opened on the NYMEX at $1.60/gallon today, up by 3.57 cents (2.23%) from yesterday’s opening price of $1.5643 cents/gallon. Today’s opening price was the highest since November 13th. Over the past 24 hours from 9AM EST to 9AM EST, gasoline prices rose significantly by 4.6 cents (2.96%.) Gasoline forward prices are currently hovering in a range of $1.59-$1.61/gallon. The latest price is $1.5996/gallon.

 
DIESEL

Diesel opened on the NYMEX at $2.0189/gallon today, up by 2.05 cents (1.01%) from yesterday’s opening price of $1.9984/gallon. Until this week, diesel forward prices had not opened above the $2/gallon level since November 20th. Over the past 24 hours from 9AM EST to 9AM EST, diesel prices rose by 4.02 cents (2.03%.) Diesel prices currently are stable, hovering in the range of $2.00-$2.03/gallon. The latest price is $2.0252/gallon.

 
WEST TEXAS INTERMEDIATE

WTI (West Texas Intermediate) crude forward prices opened at $57.24/b today, up by $1.30 (2.32%) from yesterday’s opening price of $55.94/b. Prices have hit highs of over $57.60/b. Over the past 24 hours from 9AM EST to 9AM EST, WTI crude prices rose by $1.10 (1.97%.) Currently, crude prices are struggling to maintain the $57/b level, and prices are hovering in the range of $56.85/b-$57.25/b. The latest price is $57.15/b.