After making some big gains yesterday, oil prices are trading mixed. Brent-WTI spreads are shrinking as a fairly large Cushing crude inventory draw is pushing up WTI prices. Currently, crude prices are trading higher thanks to a bullish EIA report, with prices up 84 cents to trade at $70.69.
After trading lower early this morning, fuel prices are also getting some support from the EIA’s data. Diesel prices are currently trading at $2.2371, up 0.1 cents. Gasoline prices are at $2.0181, a larger gain of 1.3 cents.
Markets continue to chatter regarding Saudi Arabia’s statement they would allow prices to rise above $80 in the short-term. Though it’s unlikely that Brent goes too much above this level in the next couple months, reduced supplies from Iran (to the tune of 30% of Iran’s oil exports) are beginning to impact markets. OPEC and Non-OPEC countries are meeting on Sunday to monitor conditions and potentially discuss future changes in quotas, but Iran is boycotting the meeting to protest OPEC’s willingness to fill in the gap of lost supplies.
EIA Weekly Report
Markets are keenly interested in this week’s inventory report as it gives some insight into the impacts of Hurricane Florence on fuel supply and demand. The EIA’s report was more in line with market expectations than the API’s, showing a draw of crude oil and gasoline along with a small build in diesel stocks. Gasoline demand was down at a national level last week, but PADD 1 East Coast did show a slight uptick in demand, likely from gas consumption as folks evacuated the Carolinas.
Mansfield continues to monitor the conditions in North Carolina, South Carolina, and Virginia. Supply conditions have generally normalized but flooding and other dangerous road conditions are stretching carrier capacity thin. Conditions are expected to remain tight through the end of the week. Given improvements made this week, Mansfield is moving to Code Orange for South Carolina and Virginia. North Carolina remains Code Red due to on-going flooding concerns.
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