Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil prices eased modestly this morning. WTI (West Texas Intermediate) crude prices in today’s trading session opened at $72.09/b, down by $0.16 from yesterday’s opening. Monday and Tuesday brought a price surge of around $2/b, and some downward correction is underway. Gasoline opened slightly lower today, while diesel prices opened with continued gains, but also began to follow crude on a downward trend.
Prices cooled yesterday when the American Petroleum Institute (API) released its inventory report, showing an increase in crude oil supplies of 2.9 million barrels during the week ended September 21st. This contradicted an earlier survey of industry experts, which forecast an inventory drawdown of 2.2 mmbbls. The API also expects a stock build of 0.949 mmbbls, countered by a diesel stock draw of 0.944 mmbbls. The U.S. Energy Information Administration (EIA) will release official statistics later today.
The U.S. Federal Open Market Committee (FOMC) will issue its policy statement this afternoon. The Fed is widely expected to announce an increase in interest rates, with some polls of economic experts placing the likelihood of a rate hike at 95%. The Fed may also strengthen statements about the future of monetary policy. This year may bring a formal end to the era of “accommodative” policies designed to support the U.S. economy in the aftermath of the Great Recession. The U.S. economy has been in a prolonged period of expansion, with extremely low rates of unemployment (3.9% in August,) high GDP growth rates, growth in equities markets, and high consumer confidence.