The oil complex continued to weaken overnight. WTI prices are down in the range of $52.50-$53.00/b this morning, after trading in the $53.50-$54.00/b range yesterday morning. The selloff has affected both crude and product markets. WTI opened at $53.14/b today, a drop of $0.67 from yesterday’s opening price. Current prices have fallen to $52.71/b, $0.30 below yesterday’s close. Product prices also have declined.
Tension between the U.S. and Iran has eased slightly, with no fresh escalation. In the past, geopolitical conflicts tended to cause steeper and faster oil price hikes. In an interesting contrast, this conflict seems unlikely to squeeze oil supplies. In fact, crude production is rising in both the U.S. and Iran. Iran joined the OPEC production cut pact only under conditions that it would be allowed to raise output moderately. The U.S. is not under any such constraint.
The U.S. Dollar is rallying. The British Pound is down with Brexit and economic growth concerns. The Euro also is unsteady with the upcoming elections and the International Monetary Fund’s statement that Greece will not be able to meet its budget targets.
Distillate opened at $1.6405/gallon in today’s session. This was 3.19 cents below yesterday’s opening price. Current prices are $1.6268/gallon, down 0.84 cents from yesterday’s close.
RBOB opened at $1.5139/gallon today, a significant drop of 4.11 cents from yesterday’s opening. RBOB has seen heavy selling. Prices are $1.4965/gallon currently, a continued fall of 1.38 cents from yesterday’s close.
The EIA released its data on U.S. Retail Gasoline and Diesel Prices for the week ended February 6. Prices for both fuels declined slightly at the national level. Details are presented in our second article today.