Today’s Market Trend
Analysis by Dr. Nancy Yamaguchi
WTI crude prices saw a sharp downward correction yesterday. As noted in yesterday’s FUELSNews, prices had a difficult time clinging to $52/b. But in a surprising move, prices have continued down, crashing even below $51/b. WTI opened at $50.81/b today, $1.02/b below yesterday’s opening price, and the lowest opening price since December 1st. Prices have crept back up slightly and are $51.10/b currently, $0.28 above yesterday’s close. Product prices followed a similar trend: dropping sharply, then levelling off in early trading today.
The price slump was traced in part to speculative buying at the market’s opening on January 3rd, which propelled prices to eighteen-month highs. Concerns about oversupply brought on a spate of selling.
The EIA released its Short-Term Energy Outlook (STEO) forecast yesterday, which placed additional pressure on prices. The STEO noted:
“U.S. crude oil production averaged an estimated 8.9 million barrels per day (b/d) in 2016 and is forecast to average 9.0 million b/d in 2017 and 9.3 million b/d in 2018. The forecast increases in production largely reflect increases in federal offshore Gulf of Mexico production. Rising tight oil production, which results from increases in drilling activity, rig efficiency, and well-level productivity, also contributes to forecast U.S. production growth.”
Despite the price weakness, some price recovery appeared after information was leaked concerning the cuts Saudi Aramco is making on crude sales to Asia for February. Reportedly, sales to China, Malaysia, and India are being cut.
Distillate opened at $1.6106/gallon in today’s session. This was a drop of 2.73 cents from yesterday’s opening price. Current prices are $1.6246/gallon, 1.32 cents above yesterday’s close.
RBOB opened at $1.5574/gallon today, down 1.24 cents from yesterday’s opening. RBOB prices have weakened for the past four sessions. Yesterday’s closing price was $1.5467/gallon. RBOB prices are currently $1.5786/gallon, 1.99 cents above yesterday’s close.
The EIA released its data on U.S. Retail Gasoline and Diesel Prices for the week ended January 9th. Prices for both fuels rose by 1.1 cents per gallon. Details are presented in our second article today.
This article is part of Daily Market News & Insights
Tagged: December 1st, distillate, gasoline, prices, rbob, wti crude
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