Fuels Market Watch 24

Exclusive daily fuels market analysis by Dr. Nancy Yamaguchi.

FUEL MARKETS TODAY – Market Overview

Crude oil prices continued to slide yesterday, stabilized overnight, and now appear to be weakening. WTI (West Texas Intermediate) crude forward prices opened at $52.59/b today, down by $1.35 (2.50%) from yesterday’s opening price of $53.94/b. Gasoline and diesel futures prices also opened lower this session. Crude and product prices are trending back up in this morning’s trading. However, U.S. and global equity markets are heading down, and they may take oil prices down with them. The Dow Jones Industrial Average just opened down by 122.78 points. Although product prices have held their value this week and are fractionally in the black, crude prices are in the red.

Crude prices appear likely to end this week in the red. As of the time of this writing, WTI crude prices are down by $1.95 (3.6%) for the week. Product prices remain very close to where they were at the start of the week, in the black by a fraction of a cent. Gasoline prices are up by 0.4 cents (0.3%) for the week. Diesel prices are up by 0.29 cents (0.2%) for the week. The pressure on crude prices may tip product prices down today.

Prices were supported this week by bullish inventory movements reported by the Energy Information Administration (EIA.) The severe winter weather may also boost weekly demand for heating fuels. Yesterday, prices relaxed upon news of the 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. Today, however, there are reports that the military action was not as successful as initially reported, and there is renewed fighting. This reversed yesterday’s price decline.

Geopolitical risks currently include the loss of Libyan supply from Sharara, the sanctions against Iran, and the sanctions against Venezuela. In a tight market, any one of these on its own could cause oil prices to spike. Yet they are barely serving to keep WTI crude prices in the $52/b-$53/b range, and the OPEC-NOPEC coalition is moving forward with oil production cuts. Concerns over the global economy are placing a cap on prices. Today’s news offers no comfort: global stocks fell for the third consecutive day on Friday, and markets appear to be heading for their first weekly loss in seven weeks. There is no sign of an end to the U.S.-China trade war, the U.S. remains under threat of another government shutdown, and the Brexit deal appears no closer to resolution.

GASOLINE

Gasoline opened on the NYMEX at $1.4248/gallon today, down by 2.86 cents (1.96%) from yesterday’s opening price of $1.4534 cents/gallon. Over the past 24 hours from 9AM EST to 9AM EST, gasoline prices dropped by 3.81 cents (2.63%.) Prices currently are trying to maintain a range of $1.43-$1.44/gallon. The latest price is $1.4356/gallon.

 
DIESEL

Diesel opened on the NYMEX at $1.90/gallon today, down by 1.09 cents (0.57%) from yesterday’s opening price of $1.9109/gallon. Over the past 24 hours from 9AM EST to 9AM EST, diesel prices fell by 1.89 cents (0.99%.) Diesel prices currently are working to maintain the range of $1.90-$1.92/gallon. The latest price is $1.9033/gallon.

 
WEST TEXAS INTERMEDIATE

WTI (West Texas Intermediate) crude forward prices opened at $52.59/b today, down by $1.35 (2.50) from yesterday’s opening price of $53.94/b. Over the past 24 hours from 9AM EST to 9AM EST, WTI crude prices fell by $1.53 (2.84%.) Currently, prices are clinging to the range of $52.25/b-$52.75/b. The latest price is $52.56/b.