Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil prices eased slightly this morning. WTI (West Texas Intermediate) crude prices in today’s trading session opened at $72.01/b, down by $0.08 from yesterday’s opening. Monday and Tuesday brought a price surge of around $2/b, and Wednesday brought some downward correction. Prices stabilized and began to recover on news from the USDOE, EIA, and the Fed. Gasoline and diesel prices opened with gains today, but currently are heading back down.

The U.S. Energy Information Administration (EIA) released official statistics on oil inventories, showing an addition of 1.852 million barrels to crude oil inventories. Gasoline inventories rose by 1.53 mmbbls. Countering this, diesel stocks were drawn down by 2.241 mmbbls. The net addition to oil inventories was 1.141 mmbbls. The EIA data was more bullish for prices than the data released by the American Petroleum Institute (API) yesterday. The API numbers showed an increase in crude oil supplies of 2.9 mmbbls, a gasoline stock build of 0.949 mmbbls, and a diesel stock draw of 0.944 mmbbls. The total was 2.905 mmbbls of oil added to inventory.

Oil prices also received support from a statement by U.S. Secretary of Energy Rick Perry, who noted that there were no plans to release oil from the U.S. Strategic Petroleum Reserve (SPR.) President Trump has looked to sell oil from the SPR as a means of raising revenue, and most recently as a way to reduce consumer prices in the U.S.

Federal Reserve Chair Jerome Powell held a press conference yesterday afternoon, announcing decisions from the Fed’s meeting. The Fed raised the rate for federal funds by a quarter point from 2% to 2.25%. Also, the central bank removed the word “accommodative” from its statement of policy direction. Chairman Powell cited the strength of the U.S. economy and pointed out that 2.25% rate is relatively low. Another rate hike is likely to be instituted in December.