Bullish Statements Boost Prices

Oil prices are giving up some of their gains this morning, bringing prices from a high of $54/bbl to below $53. It’s normal after a rapid price increase to see prices revert lower as traders cash in their profits; since Christmas Eve’s close, crude prices have risen $10/bbl, or 24%. This morning, crude is trading at $52.73, down $1.07.

Fuel prices are also down from profit-taking, though now well clear of the holiday lows. Diesel prices are trading at $1.8964, down 2.0 cents. Gasoline prices are $1.4181, losing 3.5 since Friday’s close.

The recent slowdown in prices is also a product of weakening economic activity in China. Yesterday China reported its lowest annual economic growth forecast in almost 30 years, down to just 6.6% in 2018. The IMF in turn cut its 2018 global growth forecast from 3.7% to 3.5%. While China has been absorbing record high levels of petroleum, many expect their demand to slow down as their economic growth wanes.

Last week the US rig count levels fell by the largest amount since 2016, in part a response to the pullback in prices. The Permian Basin in West Texas remains the most prolific production area, but pipeline constraints are expected to limit output from this area until the end of 2019. Still, US production is expected to grow significantly this year, helping to mitigate global supply issues.

Market Condition Report - Disclaimer
The information contained herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Furthermore, no responsibility is assumed for use of this material and no express or implied warranties or guarantees are made. This material and any view or comment expressed herein are provided for informational purposes only and should not be construed in any way as an inducement or recommendation to buy or sell products, commodity futures or options contracts.

Sign up for FUELSNews for daily market information and insights
Sign Me Up
Make a Call

We are happy to discuss your business challenges over the phone and answer any questions.

800.695.6626

Send Email

Ask your toughest questions. We'll get back to you with the best answer humanly possible.

Send Email

Find a Location

Need to contact a specfic office? View contact information for offices across the country.

View Locations

Get a Quote

Let us know what type of fuel or service you need and a team member will get a quote to you quickly.

Get a Quote