Analysis by Dr. Nancy Yamaguchi


Oil prices are rising gently this morning following yesterday’s slump. West Texas Intermediate (WTI) crude prices had topped $47 per barrel (/b) for a time on Monday and Wednesday, and they are currently back down in the range of $45.75/b – $46.00/b.


On Friday, the Baker Hughes active rig count declined by one. Although this is a minor number, it was viewed as significant because it was the first weekly decline since the week of January 13. During the first half of 2017, the active rig count climbed from 665 in the week of January 6 to 940 in the week of June 30, an increase of 275 rigs.


The American Petroleum Institute (API) reportedly expects that last week brought a 5.8-million-barrel (MMbbl) drawdown in crude oil inventories, more than double the industry survey expectation of 2.3 MMbbls. However, the API also reported a major increase in gasoline stockpiles of 5.7 MMbbls plus a 0.4-MMbbl addition to distillate stockpiles.


The market is awaiting the release of official supply data from the Energy Information Administration (EIA). Of particular interest:

  1. The U.S. crude production numbers;
  2. The oil inventory movements; and
  3. Whether the lead-up to the Fourth of July holiday weekend caused a major upsurge in gasoline and diesel demand.


WTI crude prices are in the $45.75/b – $46.00/b range this morning. Yesterday, WTI prices slumped, falling from $47.04/b at opening to $45.13/b at closing—a daily drop of $1.91/b. This more than erased the gains made during the rally that began on Friday, June 30, and continued through Monday, July 3. The market was closed for the Fourth of July holiday, and the price gains began to vanish upon market opening yesterday. WTI opened at $45.65/b today, down by $1.39 from yesterday’s opening price. Prices are $45.82/b currently, up by 69 cents from yesterday’s closing price.


Diesel opened at $1.4921/gallon this morning. This was a decrease of 2.02 cents (1.34%) below yesterday’s opening price. Current prices are $1.4933/gallon, up by 1.48 cents from yesterday’s closing price.


Gasoline opened at $1.5205/gallon today, down by 1.35 cents, or 0.88%, from yesterday’s opening. Prices are $1.5226/gallon currently, up by 2.02 cents from yesterday’s close.