Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil prices have continued to sag over the past 24 hours. WTI (West Texas Intermediate) crude prices in today’s trading session opened at $68.79/b, a drop of $1.45 from yesterday’s opening. WTI prices are remaining below the $69/b mark. Gasoline and diesel futures prices also dropped significantly in today’s trading session. Yesterday, prices made a downward correction that erased most of the midweek price surge, and there has been no news in this morning’s early trading to cause a price resurgence.
The midweek oil price rally began when the American Petroleum Institute (API,) issued a bullish inventory report, which showed a huge drawdown of 8.636 million barrels of crude oil from inventories. This was partially counterbalanced by gasoline and diesel inventory builds.
The price rally was stifled when the Energy Information Administration (EIA) later released official statistics, showing a crude inventory draw of only 5.296 mmbbls, plus significant builds in gasoline and diesel stocks. Moreover, apparent demand for diesel during the week ended September 7th dropped significantly, and there were also apparent drops in demand for gasoline and jet fuel. Although the weekly demand numbers are subject to revision, these suggest a market that is amply supplied. U.S. crude production was reported to have fallen by 100,000 bpd, based largely in pipeline infrastructure constraints, but supply concerns have been insufficient to carry WTI prices forward at levels above $70/b.
The National Hurricane Center reported that Hurricane Florence made landfall this morning near Wrightsville, North Carolina. It is a Category 1 hurricane with top sustained winds clocked at 90 mph. As of 7AM EST, Hurricane Florence was moving west at 6 mph. An estimated 280,000 people in North Carolina are without power already. According to NOAA’s Tides and Currents tables, high tide is expected at 11:57 LST, estimated at 5.19 feet. Some areas already are receiving heavy rainfall and are expecting more storm surge waters.