Weekly Snapshot

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Chinese Futures Market Looks Successful

Just over a month ago, China opened its petroleum futures market, a corollary to NYMEX WTI crude. So far, the market has been performing well, with fairly strong trading volumes. Traders have so far been mostly limited to Chinese actors, including refiners and investors. The market will need to attract more outside investment if the market wants to have a strong future. While some have feared that it could rival WTI or Brent futures contracts, so far the Chinese market has been mostly controlled by local interests. Click Here to read more from Reuters.

Markets Wonder Why OPEC is Sticking to Cuts

Some believe that OPEC will overshoot their production targets, cutting supply too far and causing prices to ratchet higher. Yet OPEC remains committed to lowering production and keeping prices elevated. Analysts warn that within the next few years, global oil markets may not have enough supply to meet rising demand. Click Here to read more from Bloomberg.

Saudi Arabia says Higher Oil Prices Won’t Change the Pace of its Reforms

Saudi Arabia is undergoing reforms ranging from large infrastructure investment to broadening women’s rights. The reforms are being overseen by Crown Prince Mohammed bin Salman and are being implemented as part of the kingdom’s “Vision 2030.” The goal is to move the economy away from its dependency on oil and boost employment for the younger population. “Higher oil prices will only help reduce the deficit and build reserves,” Mohammed bin Abdullah Al-Jadaan stated on Wednesday. Click here to read the full article from CNBC.

Summer Gasoline Prices Expected to be Highest in Four Years

EIA forecasts that drivers in the United States will pay an average of $2.74 per gallon (gal) this summer for regular gasoline, the highest average summer gasoline price in four years, according to EIA’s Short-Term Energy and Summer Fuels Outlook. EIA’s forecast gasoline price for summer 2018 (April through September) is 26 cents/gal higher than the average price last summer, largely reflecting changes in crude oil prices. Overall gasoline expenditures in 2018 are expected to be about $2,300, or nearly $200 more per household than in 2017. Click here to read the full EIA report.