Analysis by Dr. Nancy Yamaguchi
Crude prices were relatively stable this week with a downward tilt. Product prices showed a more noticeable decline. Prices appear to be ending the week in the red, barring a significant news event on Friday, February 17.
West Texas Intermediate (WTI) crude prices opened the week on Monday at $53.80 per barrel (/b), which was only one penny below the previous Monday’s opening price (February 6). Prices weakened on Tuesday and Wednesday, chiefly based on news of another major build in crude stocks. Tuesday’s and Wednesday’s prices were mainly in the $52.75 – $53.75/b bandwidth. OPEC discussions concerning a continuation of production cuts elevated prices on Thursday, though the gains have been largely given back. Friday’s opening price strengthened by $0.46, at $53.47. Over the week, this was a drop of $0.33, or 0.6%. During the week, prices ranged from a low of $52.68/b on Thursday to a high of $53.95 on Monday, a narrow range of $1.27. Current prices are $53.04/b, $0.32 below yesterday’s close.
American Petroleum Institute (API) inventory data this week showed yet another major crude stock build of 9.94 million barrels (MMbbls), plus gasoline and distillate stock builds. The official Energy Information Administration (EIA) data later showed a still-massive crude build of 9.527 MMbbls. The EIA also reported a gasoline stock build of 2.846 MMbbls, which was much larger than the API’s estimate of 0.72 MMbbls. However, the EIA reported a diesel stock draw of 0.689 MMbbls, while the API had anticipated a stock addition of 1.5 MMbbls. Last week, the EIA reported the second-largest crude stock build on its official record.
U.S. apparent demand for refined product supplied also plummeted during the week ended February 10, including a weekly drop of 508 thousand barrels per day (kbpd) of gasoline and an astonishing drop of 661 kbpd of jet fuel. The total weekly drop in demand was 2.1 million barrels per day (MMbpd). Although preliminary data on a weekly basis cannot be interpreted as the long-term trend, it nonetheless pressed down on product prices, and the market will no doubt watch for next week’s data in hopes that the collapse was merely a weekly vagary.
Diesel prices opened Monday at $1.6661/gallon. They opened this morning at $1.627/gallon, a drop of 2.4%, or 3.91 cents, for the week. Prices ranged from a high of $1.6724/gallon on Monday to a low of $1.6127/gallon on Thursday, a range of 5.97 cents. Prices currently are $1.6152/gallon, a drop of 1.39 cents from Thursday’s close.
Gasoline prices opened Monday at $1.5895/gallon. Today’s opening price of $1.523/gallon was a severe decrease of 4.4%, or 6.65 cents, for the week. Prices ranged from a low of $1.5106/gallon on Thursday to a high of $1.5399/gallon on Monday, a range of 9.25 cents. Prices are $1.4962/gallon currently, a continued weakening of 2.85 cents from Thursday’s close.
