Fuels Market Watch 24

Exclusive daily fuels market analysis by Dr. Nancy Yamaguchi.

FUEL MARKETS TODAY – Market Overview

Crude oil futures prices are stabilizing this morning, after opening slightly below Friday’s price levels. WTI (West Texas Intermediate) crude forward prices opened at $56.07/b today, down by $0.36 (0.64%) from Friday’s opening price of $56.43/b. Diesel futures prices also opened lower today, while gasoline futures prices opened with modest gains. Futures prices for appear to be stabilizing this morning, working to hold the recovered levels.

Crude and product forward prices had a mixed finish last week. WTI crude futures prices opened on Monday at $55.83/b and finished at $56.07/b, a small gain of $0.24/barrel (0.4%.) Gasoline futures prices opened on Monday at $1.7285/gallon and closed at $1.8017/gallon, up by 7.32 (4.2%) for the week. As noted last week, much of the gain was driven by the upcoming switch to low-RVP grades. Diesel forward prices opened on Monday at $1.9999/gallon and closed on Friday at $1.9998/gallon, a miniscule loss.

The week was headed for losses, but a Friday rally helped prices to recover. Saudi Arabia announced that it was cutting production even deeper than promised, reporting a production level of 10.1 million barrels per day (mmbpd) in February, down from 10.2 mmbpd in January. Under the agreement, Saudi Arabia had agreed to cut production by 0.322 mmbpd from its October level of 10.637 mmbpd. The production cuts already have exceeded 0.5 mmbpd. Moreover, Saudi Energy Minister, Khalid al-Falih, noted a plan to cut output to 9.8 mmbpd in March. Mr. al-Falih also said that OPEC and partners could extend the cut agreement beyond the initial six-month period if needed to balance the market.

Friday’s price rally was aided also when Baker Hughes reported that the U.S. active oil rig count dropped by 9 during the week ended March 8th.

Oil prices had fallen after a week of troubling economic news. This included warnings of global economic weakness from the president of the European Central Bank (ECB,) Mario Draghi. The ECB downgraded its forecast of 2019 GDP growth. Stock markets also fell. In the U.S., the Bureau of Labor Statistics (BLS) reported that job growth ground to a halt in February. Total nonfarm payroll employment rose by only 20,000 jobs, versus economist predictions of 180,000 jobs.

The Boeing Company is under fire today following a tragic crash of one of their 737 Max 8 model aircraft in Ethiopia yesterday. The same model crashed into the Java Sea in October. Several countries are grounding their fleets of the 737 MAX 8.

GASOLINE

Gasoline opened on the NYMEX at $1.7976/gallon today, up slightly by 0.32 cents (0.18%) from Friday’s opening price of $1.7944 cents/gallon. Over the past 24 hours from 9AM EST to 9AM EST, gasoline prices rebounded by 7.57 cents (3.09%.) Gasoline forward prices currently are trending up, trading between $1.80-$1.84/gallon. The latest price is $1.833/gallon.

DIESEL

Diesel opened on the NYMEX at $1.9957/gallon today, down by 0.98 cents (0.49%) from Friday’s opening price of $2.0055/gallon. Over the past 24 hours from 9AM EST to 9AM EST, diesel prices bounced back by 4.64 cents (2.38%.) Diesel prices currently are stabilizing, hovering around the $2/gallon level. The latest price is $1.9999/gallon.

WEST TEXAS INTERMEDIATE

WTI (West Texas Intermediate) crude forward prices opened at $56.07/b today, down by $0.36 (0.64%) from Friday’s opening price of $56.43/b. Over the past 24 hours from 9AM EST to 9AM EST, WTI crude prices recovered by $1.59 (2.90%.) Currently, crude prices are stabilizing, trading in the range of $56.50-$56.90/b. The latest price is $56.63/b.