Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil futures prices have remained firmly above $60/b since Friday’s close through this morning’s trading, and prices currently are cracking the $62/b barrier. These are the highest prices since early November. WTI (West Texas Intermediate) crude forward prices opened at $60.81/b today, up strongly by $1.57 (2.61%) from yesterday’s opening price of $60.24/b. Gasoline and diesel futures prices also opened with gains today. Yesterday brought a strong rally in global markets, kicked off by unexpectedly strong performance in China’s manufacturing sector in March, combined with progress in U.S.-China trade talks. Oil prices received additional strength by reports of low output by OPEC and further shutting in of Venezuelan crude.

Global markets surged yesterday in a sustained rally. Chinese manufacturing data for March revealed an unexpected bounce-back, and optimistic reports flowed concerning progress in U.S-China trade talks. The Dow Jones Industrial Average (DJIA) and the Nasdaq closed at nearly six-month highs. The DJIA jumped by nearly 330 points yesterday. Today’s market is a bit more cautious, and the DJIA handed back approximately 52 points. The economic news was not entirely rosy, since the Department of Commerce released data showing a steep drop in durable goods orders for the month of February. The drop came mainly from a reduction in orders for transportation equipment.

The first quarter of 2019 brought an increase of $14.34/b (31.3%) to WTI crude futures prices. Gasoline futures prices rose by $0.5689/gallon (43.3%.) Diesel forward prices rose by $1.9714/gallon (16.7%.) Markets now looking to the second quarter remain faced by many of the same uncertainties on the demand side and the supply side. Supplies are growing tighter, with Saudi Arabia committed to achieving a $70/b level. Brent crude is approaching this level, currently at $69.22/b.