Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil futures prices eased modestly at today’s market opening, taking a break from four consecutive days of price increases. WTI (West Texas Intermediate) crude forward prices opened at $62.50/b today, down by $0.14 (0.22%) from yesterday’s opening price of $62.64/b. WTI forward prices have jumped by over $3/barrel since last Friday’s market opening. Diesel futures prices declined today, while gasoline futures prices opened with gains. Currently, oil prices are working to hold gains. Markets are motivated by positive statements concerning the U.S.-China trade talks, but there is a desire for firmer announcements from the White House. The U.S. economic outlook received a boost from news of a drop in weekly U.S. unemployment applications, yet markets await Friday’s release of the more authoritative Monthly Jobs Report.

Oil prices tapered down yesterday when official statistics for the week showed an increase in oil supplies. The Energy Information Administration (EIA) reported yesterday that U.S. crude oil stockpiles grew by 7.238 million barrels (mmbbls) during the week ended March 29^th. Gasoline inventories were drawn down by 1.781 mmbbls, and diesel inventories were drawn down by 1.998 mmbbls. The net was an increase of 3.459 mmbbls of oil in storage. Earlier, the American Petroleum Institute (API) reported a 3.0-million barrel (mmbbl) increase in crude oil inventories, partly countered by drawdowns of 2.6 mmbbls from gasoline inventories and 0.506 mmbbls from diesel inventories.  

This morning, the U.S. Department of Labor reported that seasonally adjusted initial claims for unemployment benefits dropped by 10,000 during the week ended March 30^th. The advance figure for initial claims was 202,000, down 10,000 from the prior week. The Department of Labor reported that this was the lowest level of initial claims since December 6, 1969, when it was also 202,000. This week’s figures were the lowest in over 49 years, showing an extremely strong labor market in the U.S. Economists hope that this positive weekly information will be corroborated by the more closely watched monthly Jobs Report from the U.S. Bureau of Labor Statistics. This data will be released tomorrow.

Adding to market optimism, White House economic adviser Larry Kudlow noted “good headway” in the U.S.-China trade talks last week in Beijing. China’s Vice Premier Liu He is scheduled to meet with President Donald Trump this afternoon. A successful meeting could result in the announcement of a date for a meeting between President Trump and Chinese President Xi Jinping.