Analysis by Dr. Nancy Yamaguchi
Oi prices are subdued this morning after brief buying rallies on Friday and Monday. Crude and product prices plunged following the OPEC meeting in Vienna on Thursday, despite the fact that OPEC agreed to make the nine-month extension to the production cut agreement. Friday brought additional buying interest ahead of the Memorial Day weekend, and prices began to recover. Crude, gasoline and diesel all ended in the red for the week, however, and prices this morning have weakened.
Baker Hughes released the weekly oil and gas rig count on Friday, reporting an addition of seven rigs. The rig count has increased in 20 of the 21 weeks so far this year, adding 243 rigs and bringing the total rig count for 908 for the week ended May 26. This is the highest rig count since the week ended April 24, 2015, approximately 25 months ago. It appears likely that the extension of the OPEC production cuts will encourage U.S. producers in coming months.
West Texas Intermediate (WTI) crude prices are in the $49.25 – $49.50 per barrel (/b) range this morning. WTI opened at $49.93/b today, a significant recovery of $1.18, or 2.42%, above Friday’s opening price. Current prices are $49.40/b, back down by 40 cents below Friday’s closing price.
Diesel opened at $1.5621/gallon this morning. This was a recovery of 1.5 cents (0.97%) above Friday’s opening price. Current prices are $1.5475/gallon, down by 1.58 cents from Friday’s closing price.
Gasoline opened at $1.6416/gallon today, a recovery of 3.11 cents, or 1.93%, from yesterday’s opening. Prices are $1.6275/gallon currently, down 1.51 cents from Friday’s close.
