By Dr. Nancy Yamaguchi
WTI crude prices opened the week Monday at a very strong $53.33/b. Tuesday’s market opened $0.47 lower, but opening prices were stable on Wednesday and Thursday, and Thursday brought a rally that closed the day at $53.78/b. Friday’s opening was 4 cents lower, at $53.74. Over the week, this was an increase of $0.41, or 0.8%. During the week, prices ranged from a low of $52.21/b on Monday to a high of $54.06 on Thursday, a narrow range of $1.85. Current prices are $53.51/b, in the black for the week if they are maintained today.
The OPEC production cuts are reportedly well underway, and compliance levels are beyond what many market watchers had anticipated. It appears that the market overall is taking this seriously, though many market watchers await proof from independent sources. Speculative long positions in WTI and Brent crudes are at very high levels, leading some banks to ponder whether a correction is in order.
The week’s supply and demand fundamentals were bearish: EIA data on oil stocks showed increases across the board: Crude stock additions of 2.84 mmbbls, gasoline stock additions of 6.796 mmbbls, and a small addition to distillate stocks of 0.076 mmbbls. Apparent demand for the month so far has been weak, with distillate demand rising but drops in demand for gasoline, jet fuel, and propane. And U.S. crude production is on the rise.
Distillate prices opened Monday at $1.6361/gallon. They opened this morning at $1.648/gallon, an increase of 0.7%, or 1.19 cents, for the week. Prices ranged from a low of $1.6018/gallon on Wednesday to a high of $1.6525/gallon on Thursday, a range of 5.07 cents. Prices are currently $1.6225/gallon, 1.84 cents below Thursday’s close.
Gasoline RBOB prices opened Monday at $1.5645/gallon. Today’s opening price of $1.533/gallon was a decline of 2.0%, or 3.15 cents, for the week. Prices ranged from a low of $1.5041/gallon on Thursday to a high of $1.5931/gallon on Tuesday, a range of 8.9 cents. Prices are $1.53/gallon currently, a decline of 0.77 cents below Thursday’s close.
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