Like many recent weeks, oil markets this week were characterized by steady movement higher, only to succumb to a Friday sell-off. Still, this week was a bit unusual in how high markets climbed, with crude setting a new 2019 high water mark. After strong and steady losses last quarter, the quick rebound for oil prices in Q1 has not entirely materialized yet, despite some the general upward trend.
This week didn’t bring much in the way of market altering news, but it did bring numerous agency reports on oil trends. OPEC’s report showed a bearish bias that demand would continue weakening this year and Non-OPEC supply would keep rising. Still, their bias simply sustains their resolve to balance the market through output limits, which most expect to be extended for the remainder of 2019. The EIA saw little changes to its output for the year, focusing more on the US’s continued growth in production and the potential to be a net oil exporter in the next couple years. The IEA’s analysis shows markets tightening steeply in Q2 amid Iran and Venezuelan sanctions.
Prices in Review
Crude oil prices began the week at $56.07, which would turn out to be the lowest opening price of the week. Prices rose steadily higher throughout the week, with the largest gains coming on Wednesday following the EIA’s confirmation that oil inventories fell significantly last week. WTI opened on Friday at $58.51, a gain of $2.44 (4.4%) for the week.
Diesel prices were surprisingly weak due to a surprise inventory draw on Wednesday, despite the product having one of the stronger outlooks in the petroleum complex. Weeks of strength seem to have given way to lower diesel crack spreads. Diesel prices opened the week at $1.9957, gyrating chaotically throughout the week to open at $1.9825 this morning, a loss of 1.3 cents (-0.7%).
Gasoline prices took yet a different path this week, peaking mid-week before turning lower. Gasoline prices opened the week at $1.7976, climbing as high as $1.88 on Thursday before retreating. This morning gasoline prices opened at $1.8480, a gain of 5 cents (2.8%).