Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil futures prices sank dramatically this morning, apparently reacting to a tweet from President Trump warning that oil prices were “getting too high.” WTI (West Texas Intermediate) crude forward prices opened at $57.17/b today, up by $0.33 (0.58%) from Friday’s opening price of $56.84/b. However, WTI prices plunged below the $56/b level in today’s early trading. Gasoline and diesel futures prices opened lower today, and they also collapsed in early trading. President Trump’s tweet urged “OPEC, please relax and take it easy.” There has been no concrete action from the U.S., but investors immediately backed away from oil futures, and prices tanked. Markets today will be deciding whether the price drop is a blip, or whether it is a downward correction that will be sustained.

Crude oil and refined prices ended last week in the black once again. WTI crude prices opened on Tuesday, February 19^th (Monday was President’s day,) at $55.78/b and closed Friday at $57.26/b, up by $1.48 (2.7%) for the week. Gasoline prices opened on Tuesday at $1.5728/gallon and closed on Friday at $1.6112, up by 3.84 cents (2.4%) for the week. Diesel prices opened on Tuesday at $2.0214/gallon and closed on Friday at $2.0311/gallon, up by 0.97 cents (0.5%) for the week. It was the first time that diesel forward prices had opened and closed a week above $2/gallon since the second week of November. President Trump’s statements about oil prices being “too high” has eroded some of the gains, but without any concrete action, it is not yet possible to discern whether the market will adopt the downturn as a price correction, or whether it will be more of a blip in today’s prices.

Friday’s meeting between China’s top negotiator, Vice Premier Liu He, and President Donald Trump resulted in a delay of the March 1^st deadline for a planned increase in U.S. tariffs on Chinese goods. Trump had planned to raise tariffs to 25% from 10% on approximately $200 billion worth of Chinese imports. This is being interpreted as a sign than the two countries are getting close to striking a deal. However, it also is a sign that China was not willing to concede to all U.S. demands during the Friday meeting. President Trump is now proposing a summit between himself and Chinese President Xi Jinping at his “Mar-a-Lago” property in Florida. The Chinese stock market has reacted more favorably than the U.S. stock market.