Markets are trading lower this morning after trading exactly flat on Friday – not a penny higher or lower than Thursday’s close. WTI Crude is currently trading at $56.23, down 23 cents.
Fuel prices are relatively flat this morning. Like crude, diesel prices ended Friday virtually flat; gasoline was the lone deviant with nearly 2 cents in gains. This morning, diesel prices are $2.0796, up 0.6 cents. Gasoline prices are $1.5787, up 0.2 cents.
Markets appear quite bearish currently – CFTC data reported another decline in net long positions for WTI Crude among managed money. Friday’s morning rally was quashed by selling activity, bringing prices back to trading nearly flat. Given this week’s holidays, don’t expect any major trading activity this week, though prices can sometimes see extra volatility when fewer trades occur.
Markets continue to look ahead to the December OPEC meeting. Saudi Arabia is reportedly quite angry with Trump’s Iran sanction waivers that went to eight countries – they were not informed ahead of time to manage supplies accordingly. Now that markets are clearly oversupplied (OPEC increased production significantly ahead of what turned out to be a very small output cut from Iran), Saudi Arabia is pushing for a 1.4 MMbpd decrease in OPEC supplies in 2019, a return to the tightly managed OPEC output we saw in 2017 and early 2018.
At an APEC (Asia-Pacific Economic Cooperation) meeting this week, spats between the US and China dwarfed the agenda and resulted in the group failing to produce a summary communique for the first time in the meeting’s 29-year history. Reportedly the disputes centered on trade; China opposed a portion of the statement that called for fighting protectionism and unfair trade practices. All twenty other attendee nations supported the statement, including the US. The fight does not bode well for the upcoming meeting between President Trump and Chinese President Xi Jinping, when the two leaders are expected to discuss the escalating trade war that has embroiled both nations.