Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil futures prices started modestly down this morning, but they now appear to be stabilizing after last week’s surge and sell-off. Prices last week peaked at annual highs, with some trades nearly hitting $59/b. WTI (West Texas Intermediate) crude forward prices opened today at $58.45/b today, down slightly by $0.06 (0.10%) from Friday’s opening price of $58.51/b. Gasoline futures prices opened with gains today, while diesel prices continued to trail down. Futures prices are up-and-down this morning, with crude prices stabilizing, gasoline prices strengthening, and diesel prices continuing to languish.

Last week, WTI crude and gasoline futures prices finished in the black for the week. Diesel prices remained in the red. WTI crude forward prices opened on Monday at $56.07 and closed Friday at $58.52. an increase of $2.45/b (4.3%.) Gasoline forward prices opened on Monday at $1.7976/gallon and closed on Friday at $1.8577, up by 6.0 cents/gallon (3.3%.) Diesel forward prices opened on Monday at $1.9957/gallon and closed Friday at $1.9677/gallon, down by 2.8 cents/gallon (1.4%.)

OPEC and other key producing countries met this weekend in Baku, Azerbaijan. The group has cut production by over 1.2 million barrels per day (mmbpd) to rebalance the global oil market and strengthen prices. Within the group, Saudi Arabia has made far deeper cuts than pledged, but Saudi Energy Minister Khalid al-Falih warned that this would not “continue indefinitely.” Russian Energy Minister Alexander Novik said that Russia was near full compliance with its agreed-upon cuts, close to cutting 140,000 bpd, and that it had not been able to make deeper cuts earlier because of winter conditions. Minister Novik also stated that U.S. sanctions distort the picture, “they are imposed to help sell goods of the country that is imposing the sanctions, and they create uncertainty.”

OPEC is scheduled to meet again in April, but the group noted that it will need additional information on what the U.S. plans to do about the current set of waivers on the Iranian sanctions. This decision is not scheduled until May. Therefore, the group has not reached consensus on whether the cuts will be continued in the second half of 2019. The group is likely to postpone the April meeting until June.