*FUELSNews will resume on Tuesday, May 29thafter Memorial Day.
The energy complex is trading sharply lower this morning. Crude lost over a dollar yesterday due to a bearish EIA reporting a large build in crude inventories and OPEC chatter. Crude prices are continuing to trade lower this morning, down another $1.59 (2.25%) at $69.12. This is the first time oil has fallen below $70/bbl since May 8.
Fuel prices are also plummeting this morning. Diesel prices are currently trading at $2.2268, down nearly 4 cents (1.78%) since yesterday. Gasoline prices are $2.1918 currently, a loss of 4.2 cents (1.88%).
Weakness in prices this morning can be mostly attributed to news that OPEC and Russia are discussing increasing oil output by nearly 1 million barrels per day. This increase would bring OPEC compliance back down to 100% from its recent April compliance of 152%. Secretary-General Mohammad Barkindo said OPEC leaders began the discussion following a tweet from President Trump who accused OPEC of “artificially” boosting prices.
Up to this point, OPEC has seen no reason to ease production cuts. However, worries about supply after the U.S. withdrew from the Iran Nuclear Deal in conjunction with Venezuelan’s oil collapse have spurred OPEC to rethink their original mindset. Russia and Saudi Arabia met for the discussion in St. Petersburg this week, but a final decision will not be made until the official meeting in Vienna on June 22-23.
As we head into the holiday weekend, a storm is brewing in the Gulf Coast. A tropical depression is expected to from in the Gulf of Mexico over the weekend bringing heavy rain and the potential for flash flooding in the Southeast and Florida. Monday and early Tuesday deliveries could possibly be delayed due to high winds and flooding between Louisiana and the Florida Panhandle. Mansfield will continue to monitor the status of the storm.