Crude oil ended yesterday flat with the previous day, no thanks to flagging equity trades that saw the Dow Jones down almost 300 points from its opening level. This morning crude is feeling the effects of a chaotic stock market. Crude oil is currently trading at $56.08, down 48 cents.
Fuel prices are mixed, with diesel prices flailing while gasoline continues building on yesterday’s strong gains. Diesel prices this morning are trading at $2.0123, down 0.4 cents from yesterday’s close. Gasoline prices are $1.7709, up 0.4 cents.
Markets seems to be fixating on Libya, where production is resuming at the El Sharara field. Of course, Libya isn’t exactly known for smooth operations. The field will take time to reach full production, and another militia attack could quickly bring the field down once more. But for now, all indicators point towards 300 kbpd of oil coming back online in the near term, which will push oil prices lower.
After last week’s huge petroleum inventory draw, the API is now projecting a sizable crude oil build, while fuel inventories are turning lower. A crude oil build at Cushing is also weighing on markets. Still, the EIA has the final word, so folks will be waiting for their data to confirm whether the bearish news is true.
Russia is swooping in to save Venezuela’s oil production, which has been severely affected by the lack of diluents from the US. Diluents are light oils used to make Venezuela’s heavy, viscous crude move more freely through pipelines. After weeks without shipments, Russia is sending the first shipment of diluents to aid Venezuelan production. Still, the shipment is just a first step – Russia is sending 1 million barrels of diluent, but Venezuela was importing 2-3 million barrels per month before sanctions took hold. With Russia and China supporting Venezuelan leader Maduro while the US backs National Assembly leader Guaido, there doesn’t seem to be a clear end in sight for the battle over Venezuela.