Fuels Market Watch 24

Exclusive daily fuels market analysis by Dr. Nancy Yamaguchi.

FUEL MARKETS TODAY – Market Overview

Crude oil prices declined again this morning, giving back yesterday’s gains. WTI (West Texas Intermediate) crude forward prices opened at $53.94/b today, up by $0.21 (0.39%) from yesterday’s opening price of $53.73/b. Gasoline and diesel futures prices also opened with gains this session, some of which were quickly yielded. Yesterday’s price increase was based largely on bullish inventory data. However, prices are being pressured down by a strong U.S. dollar and by an expected increase in output from Libya.

Yesterday, oil prices rose based upon bullish inventory movements reported by the Energy Information Administration (EIA.) The EIA reported a smaller-than-expected addition of 1.263 million barrels (mmbbls) to crude inventories, a smaller-than-expected addition of 0.513 mmbbls to gasoline inventories, plus a significant and unexpected drawdown of 2.257 mmbbls from diesel stockpiles. The net was a drawdown of 0.481 mmbbls from oil inventories. This contrasted sharply from the earlier data released by the American Petroleum Institute (API,) which had shown across-the-board additions to stockpiles: a crude stock build of 2.514 mmbbls, a gasoline stock build of 1.731 mmbbls, and a diesel stock build of 1.141 mmbbls, for a total inventory build of 5.386 mmbbls.

Soon after, however, prices headed back down upon news of potential restoration of crude oil output from Libya. Libya’s Sharara oilfield, which can produce 300,000-340,00 barrels per day (bpd) of crude, was re-taken by military forces loyal to the U.N.-backed government in Tripoli. The Sharara facilities had been shut down for nearly two months after being taken by armed militants, who reportedly demanded better living conditions in that part of the country, plus a ransom. Libya’s National Oil Company refused to pay the ransom. Libya is not a participant in the OPEC-NOPEC production cut agreement, so it is assumed that OPEC’s output will rise unless the other participants cut production more aggressively.

GASOLINE

Gasoline opened on the NYMEX at $1.4534/gallon today, up by 2.93 cents (2.00%) from yesterday’s opening price of $1.4395 cents/gallon. Over the past 24 hours from 9AM EST to 9AM EST, gasoline prices rose by 1.56 cents (1.09%.) Prices currently appear to be stabilizing in the range of $1.44-$1.46/gallon. The latest price is $1.4539/gallon.

 
DIESEL

Diesel opened on the NYMEX at $1.9109/gallon today, up by 1.45 cents (0.76%) from yesterday’s opening price of $1.8964/gallon. Over the past 24 hours from 9AM EST to 9AM EST, diesel prices rose slightly by 0.27 cents (0.14%.) Diesel prices currently appear to be stabilizing in the range of $1.90-$1.92/gallon. The latest price is $1.9096/gallon.

 
WEST TEXAS INTERMEDIATE

WTI (West Texas Intermediate) crude forward prices opened at $53.94/b today, up by $0.21 (0.39%) from yesterday’s opening price of $53.73/b. Over the past 24 hours from 9AM EST to 9AM EST, WTI crude prices yielded the gains and declined by $0.33 (0.61%.) Prices continued to weaken overnight, as news of expanding supply overcame bullish data on U.S. inventories. Currently, prices are hovering in the range of $53.30/b-$53.70. The latest price is $53.55/b.