Analysis by Dr. Nancy Yamaguchi
Oil prices are stable this morning, holding to the week’s gains. Crude and product prices surged on Wednesday, and they have traded in a narrow range since then. Note that despite this week’s recovery, prices remain roughly where they were in November, prior to OPEC making its historic production cut deal.
The OPEC-non-OPEC production cut agreement received a boost yesterday when Turkmenistan indicated that it might join in the cut agreement. Turkmenistan plans to attend the OPEC meeting on May 25 in Vienna. There appears to be a high probability that the OPEC-non-OPEC group will decide to extend the cuts beyond the originally planned June 30 end date.
Concerns remain about the persistent oversupply, however. Libyan output reportedly has risen to 800 thousand barrels per day (kbpd) for the first time since 2014, for example, and the National Oil Company (NOC) has stated that production could rise as high as 1,000 – 1,200 kbpd if peaceful conditions prevail and the political and physical conditions allow oil to flow freely. Libya is not part of the production cut agreement.
West Texas Intermediate (WTI) crude prices are in the range of $47.50 – $48.00 per barrel (/b) this morning. Prices have been fairly stable, holding to Wednesday’s gains. WTI opened at $47.81/b today, an increase of 42 cents, or 0.89%, above yesterday’s opening price. Current WTI prices are $47.83/b, unchanged from yesterday’s closing price. Since April 12, WTI crude prices have opened lower in 13 of the last 21 trading sessions, falling by 10% ($5.59/b) since then.
Diesel opened at $1.49/gallon in today’s trading session. This was an increase of 1.35 cents (0.91%) above yesterday’s opening price. Current prices are $1.4939/gallon, up slightly by 0.4 cents from yesterday’s closing price. Diesel prices have opened lower in 16 of the last 21 trading sessions, shedding 16.45 cents, or 9.9%, since April 12.
Gasoline prices opened today at $1.567/gallon, an increase of 1.5%, or 2.31 cents, above yesterday’s opening price. Prices are $1.5753/gallon currently, up 1.31 cents from yesterday’s close. Gasoline prices have opened lower in 15 of the last 21 trading sessions, dropping by a total of 19.69 cents, or 11.2%, since April 12.