We’ve seen a general pattern lately of prices rising slowly for a while, then quickly falling. This week was a rising week, a reversal from last week’s large drop. Last week’s opening price was $67.78, in line with today’s opening price for crude. The up-down-up pattern has left markets wondering what’s next for oil – will it break free of its current holding pattern, or simply reverse again once prices approach $72-$74/bbl?
It’s been an interesting week for crude markets. Early in the week, President Trump announced an 11 million barrel release of crude oil from the Strategic Petroleum Reserve, to be released in October/November ahead of Iran sanctions being imposed. The stated reason for the release is to ease the burden of Iran sanctions, though the close alignment to the midterms is a convenient benefit for Republicans.
The EIA’s data showing a significant crude inventory draw helped boost prices mid-week, though the report showed less-than-exciting demand trends. Normalizing imports helped to bring inventories lower, following last week’s huge surge in imports that drove crude stocks higher.
Prices in Review
Crude oil began the week at $65.91, rose on Monday and Tuesday before plummeting overnight Tuesday evening following the API data release. Markets reacted more positively to the EIA’s data, sending prices higher. This morning crude prices opened at $67.90, a gain of nearly $2/bbl (+3.0%).
Diesel prices have seen even more energetic growth, steadily gaining throughout the week. Heating oil opened the week at $2.0976, rising each day and opening this morning at $2.1770, a gain of almost 8 cents (+3.8%).
Gasoline saw the most rapid growth this week, despite showing an inventory build. Gasoline has been hit hard over the past few weeks, so this week’s recovery was equally as overstated. Gas prices opened the week at $1.9805, the lowest opening since April, but quickly rose to $2.0778, a gain of 8.2 cents (+4.1%).