Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil prices are ramping up this morning after yesterday’s lull. Prices regained the $57/b level and are looking now to $58/b. WTI (West Texas Intermediate) crude forward prices opened at $56.84/b today, down by $0.40 (0.7%) from yesterday’s opening price of $57.24/b, but prices quickly regained the $57/b level today. Gasoline and diesel futures prices opened with gains today. Markets are pinning hopes on significant progress in the U.S.-China trade war. Prices jumped upon reports that negotiators were penning memoranda of understanding in advance of today’s scheduled meeting with President Donald Trump.

Oil prices appear to be headed for another week of solid gains. As of the time of this writing, WTI prices are up by $1.99 (3.6%) for the week, gasoline prices are up by 5.13 cents (3.3%,) and diesel prices are up by 2.27 cents (1.1%.)

Yesterday, the Energy Information Administration (EIA) released official statistics on weekly supply and demand. The data were more bearish than earlier data from the American Petroleum Institute (API.) The EIA reported an addition of 3.672 million barrels (mmbbls) to crude inventories, partially offset by drawdowns of 1.454 mmbbls from gasoline stocks and 1.517 mmbbls from diesel stocks. The net was a build of 0.701 mmbbls. The API had reported an addition of 1.26 mmbbls to crude inventories, a drawdown of 1.55 mmbbls from gasoline inventories, and a drawdown of 0.758 mmbbls from diesel inventories, totaling a net drawdown of 1.048 mmbbls. Prices weakened on the news, but the upward trend was revived by optimism about the U.S.-China trade talks.

This afternoon, a meeting is scheduled between China’s top negotiator, Vice Premier Liu He, and President Donald Trump. Earlier meetings between the top negotiators for both sides have been geared toward creating memoranda of understanding on the major disputes, intended as the basis for a preliminary agreement. China has proposed to increase purchases of U.S. goods, including $30 billion more in agricultural products.