Analysis by Dr. Nancy Yamaguchi
Crude and product prices are trading in a narrow range this morning, perhaps indicating that the severe downward movement of the past few days has bottomed out for the most part. Crude, gasoline and diesel futures prices have opened lower for the past five trading sessions. This morning, West Texas Intermediate (WTI) crude opened at a price $4 per barrel (/b) less than it was on May 24, the eve of the OPEC-non-OPEC meeting. Gasoline prices have fallen nearly 13 cents/gallon. Diesel prices have fallen by over 15 cents/gallon.
Markets overall appear to be in a cautious state, with several risk events this week. This will include three key events on Thursday: the European Central Bank (ECB) meeting; the United Kingdom’s Parliamentary Election; and former FBI Chief James Comey’s testimony before the U.S. Congress. Investors are looking to safe havens such as gold, treasuries and the yen until the results are out.
The Energy Information Administration (EIA) has released data on gasoline and diesel retail prices for the week ended June 5. At the national level, gasoline retail prices rose by 0.8 cents/gallon. Diesel prices declined by 0.7 cents/gallon. Prices have weakened since the OPEC-non-OPEC meeting on May 25, and this is reflected in last week’s retail prices. If prices continue to ease, it is likely next week’s retail prices will continue to decrease. Gasoline pump prices averaged $2.414/gallon during the week, a mere 3.3 cents above last year’s price for the same week. Given this week’s downward trend in prices, next week’s retail gasoline prices could be even cheaper than they were last year.
WTI crude prices have continued to weaken, and they are in the $47.00/b – $47.50/b range this morning. WTI opened at $47.40/b today, a decline of 31 cents, or 0.65%, below Monday’s opening price. Current prices are $47.28/b, a decrease of 12 cents below Monday’s closing price.
Diesel opened at $1.4594/gallon this morning. This was a drop of 2.41 cents (1.62%) below yesterday’s opening price. Current prices are $1.4565/gallon, down by 0.28 cents from yesterday’s closing price.
Gasoline opened at $1.539/gallon today, a significant drop of 3.8 cents, or 2.41%, from yesterday’s opening. Prices are $1.5353/gallon currently, a decline of 0.28 cents from Friday’s close.