Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

Crude oil and refined product prices began to stabilize over the past 24 hours. Strong gains were seen last week, followed by a ramping up of prices when Tropical Storm Gordon began to approach the Gulf Coast. The storm weakened, and prices eased. WTI (West Texas Intermediate) crude prices in today’s trading session opened at $68.64/b, down by $0.79 from yesterday’s opening. Gasoline and diesel futures prices opened significantly lower in today’s session. The price gains achieved last week largely have been eroded, but prices today are steady.

The U.S. market today is awaiting two important data releases: the U.S. weekly supply data from the U.S. Energy Information Administration (EIA;) and the Jobs Report from the U.S. Bureau of Labor Statistics (BLS.) The EIA data is delayed by a day because of the Labor Day holiday. The BLS data will be scrutinized because unemployment rates have been extraordinarily low, and the country has yet to see whether trade war concerns will impact employment.

The American Petroleum Institute (API) estimated that crude oil inventories were drawn down by 1.2 million barrels (mmbbls) during the week ended August 31st. However, the API calculated that gasoline inventories rose by 1.0 mmbbls, and diesel inventories rose by 1.8 mmbbls, resulting in a net inflow to storage. Traders will look to today’s official EIA data either to reinforce or to rebut the bearish API numbers. Note however that the week leading to a three-day weekend often creates unusual data patterns, particularly when coupled with a potential hurricane.