From The Desk Of The Publisher
We’ve listened to input by our readers and are making a few changes to our format. First, we’re changing from a daily fuels analysis to a more in-depth and nuanced weekly publishing schedule. We will still offer the exclusive analysis of the entire downstream fuel industry by Dr. Nancy Yamaguchi that you’ve come to trust and as you can see, we’ve actually expanded the analysis.
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Gary Bevers, Publisher
Oil prices began this week sinking under the weight of new tariffs in the U.S.-China trade dispute and an increase in U.S. oil supply. Prices began to climb as geopolitical tensions rose in the Middle East in the wake of attacks on oil tankers and infrastructure. WTI crude prices this morning opened $1.48/b above last Friday’s level, and currently, crude prices have climbed back above $63/b. Our weekly price review covers hourly forward prices from 9AM EST Friday May 10th through 9AM EST Friday May 17th. Three summary charts are followed by the Price Movers This Week briefing for a more thorough review.
Gasoline opened on the NYMEX at $1.9721/gallon on Friday May 10th and opened on Friday May 17th at $2.0675, strongly up by 9.54 cents (4.8%.) Gasoline forward prices currently are stabilizing after a strong upward movement, with trades occurring mainly in the range of $2.05-$2.08/gallon. The latest price is $2.0621/gallon.
Diesel opened on the NYMEX at $2.0434/gallon on Friday May 10th and opened on Friday May 17th at $2.1273, up significantly by 8.39 cents (4.1%.) Diesel prices followed crude prices up in response to geopolitical tension, and prices are now stabilizing in a higher range. Diesel prices currently are trading in the $2.11-$2.13/gallon range. The latest price is $2.1143/gallon.
WEST TEXAS INTERMEDIATE PRICES
PRICE MOVERS THIS WEEK : BRIEFING
Oil prices collapsed at the offset of the week, with WTI crude prices dropping below $61/b. Markets were uneasy over setbacks in the U.S.-China trade negotiations and the launching of tariffs by the U.S. Additional U.S. actions are possible blocking Chinese firms that are considered a national security threat. Analysts believe that blocking trade of necessary components could hamper the rollout of 5G wireless networks.
Prices were dealt another blow when the American Petroleum Institute (API) reported that U.S. crude oil inventories rose by 8.6 million barrels (mmbbls,) while gasoline inventories rose by 0.567 mmbbls and diesel inventories rose by 2.2 mmbbls. The API net addition to inventories was a massive 11.367 mmbbls. The API report was followed by a less bearish set of official statistics from U.S. Energy Information Administration (EIA.) The EIA reported: 5.431 mmbbls added to crude oil inventories, 1.123 mmbbls drawn down from gasoline inventories, and 0.084 mmbbls added to diesel inventories. The net addition was 4.391 mmbbls.
The downward slide in oil prices was halted by a ratcheting up of geopolitical tension in the Middle East. Four tankers were attacked in the Persian Gulf: two Saudi Arabian, one Norwegian, and one belonging to the UAE. The aggrieved parties were cautious about assigning blame. Saudi Arabia reported that its East-West pipeline was fully operational after drone attacks from Yemen on Tuesday. Saudi Arabia has accused Iran of encouraging the attack. U.S.-Iran tensions already were high, and the U.S. State Department recalled non-emergency staff from Iraq, believing the Iran threat to be credible. The recent fall in oil prices has been reversed, and WTI crude prices are back above $63/b. However, oil prices have not spiked. U.S. President Trump has recently adopted a more conciliatory stance toward Iran, given his campaign promises about keeping the U.S. out of armed conflict in the Middle East.