Market Continues 7-Day Up-Streak

By Published On: January 8, 2019Categories: Crude, Daily Market News & Insights, Diesel, Gasoline

Oil prices are sustaining gains this morning, knocking on the $50/bbl ceiling that has capped oil prices for the past few weeks. Crude oil is trading at $49.05 this morning, up 53 cents as the 7-day streak of gains appears to be holding.

Fuel prices are also up this morning, with diesel above $1.80 for the first time since before Christmas. Diesel prices are currently trading at $1.7992, up 2.1 cents from yesterday’s close. Gasoline prices are up $1.3434, rising by a much smaller 0.3 cents.

Sentiment is slowly improving on global growth prospects as US-China trade talks continue. Leaders on both sides have expressed optimism that a deal will be reached – though don’t be surprised if a deal includes some form of tariffs. Trump has been quite vocal that whether or not we sign a deal with China, we’re receiving billions of dollars in tariffs, which he counts as a win. Still, the administration is catching flack following Apple’s announcement that tariffs were having an adverse impact on their profits. Regardless of the final deal, any signal of certainty will help normalize trading relations, allowing Chinese companies to resume purchases of American goods when profitable, and vice versa.

Adding to bullish headwinds is a falling dollar, declining after the Fed’s hint of slower interest rate growth in 2019. Markets are now even factoring in a possible Fed rate cut this year, which contrasts sharply with the Fed’s stated goal of 2 rate hikes. The Fed’s action come amid uncertainty about China’s economy spilling over globally. Although jobs and wage data have been supportive of rate hikes, Fed Chair Powell noted concerns about inflation.

In more direct fundamental news, Saudi Arabia is reportedly moving towards even steeper production cuts than originally planned. A report citing unnamed sources in the oil regime shared that Saudi Arabia will cut 800 kbpd below its November production – an additional 300 kbpd relative to their last cut. The kingdom seems committed to balancing markets and returning prices to their former highs of $70/bbl.

This article is part of Crude


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