News Out of Asia Putting Downward Pressure on Markets

On Thursday, WTI Crude finished higher even in the face of relatively bearish EIA inventory news.  This week will mark the first week of losses with the previous four consecutive weeks of gains in crude.  Even with this week’s losses, the month of May is on track to finish with over 70% in monthly gains.

Crude prices are feeling downward pressure in early trading this morning due partially to news coming out of Asia.  Fears of a second wave of coronavirus cases arising out of South Korea have caused pause among traders.  South Korea has been considered a model in how to cope with the recent pandemic.  Many countries have followed South Korea’s lead in testing for the virus, social distancing, and contact tracing.  Should South Korea experience a resurgence of the virus, many are concerned that other countries will follow suit.

Chinese-US relations are also dragging down markets this morning.  Earlier this week, the US announced that Hong Kong was no longer autonomous from China.  This declaration could have far-reaching economic effects for Hong Kong.  Hong Kong enjoys special status and considerations from the US because of its prior autonomy from China. The United States may soon terminate its special economic and trading relationship with Hong Kong. While the declaration doesn’t change anything right now, it does suggest that Washington could, in the future, revoke the special status it granted the city in 1992. This friction between the US and China endangers the Phase 1 Trade deal previously agreed to by the two countries and could have lasting long-term effects on US-China relations.

The EIA reported a surprise rise in crude stocks of 7.9 MMbbls, versus an expected decrease of 1.9 MMbbls.  At Cushing, the EIA reported that stocks fell by 3.4 MMbbls. Diesel inventories reported another large build, bringing inventories to 24% above the five-year seasonal average. Gasoline reported a small surprise inventory draw.  Gasoline inventories are about 10% above the five-year average for this time of year.

Crude prices are down this morning.  WTI Crude is trading at $33.13, a loss of 58 cents.

Fuel is relatively flat in early trading this morning.  Diesel is trading at $0.9225, a fractional loss.  Gasoline is trading at $0.9968, also a fractional loss.

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
Give Us a Call Today

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

800.695.6626

Send Us an Email

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

Send Email

Find a Mansfield Location

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

View Locations

Get a Quote Today

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