As of Friday’s open, the crude market is down for the week. The week opened with a continuation of the previous week’s closing weakness. The markets were relatively flat through mid-week as markets continued to weigh the effects of sanctions on Iran and Venezualen turbulence versus OPEC+’s ability and desire to make sure the markets remain supplied. After the EIA’s report of a large crude build Mid-week, the crude market retreated and as of early Friday morning trading, those losses are sticking.
Trump’s tweet last week that he had “called up” OPEC and the news that the U.S. and China are near a trade deal have acted as a counter to the supply disruptions caused by sanctions on Venezuela and Iran. The markets seem to be factoring in that OPEC+ will insure the supply of crude to the market. Saudi Arabia has spare capacity to more than cover the barrels lost from the market from Iran and Venezuela. The Kingdom is even below their self imposed quota and could raise supply without breaking their OPEC+ agreements. The Saudi’s have hinted that they will not act too quickly and will wait to see how those lost barrels affect the market.
Prices in Review
WTI Crude opened the week at $62.95. It remained relatively flat until the large crude build was reported mid-week which dragged prices lower. It opened Friday at $61.55, a loss of $1.40 (-2.2%).
Diesel opened the week at $2.0435. It experienced some gains until mid-week, after which we saw some profit taking. Diesel opened Friday at $2.0675, a gain of 2.4 cents (1.2%).
Gasoline opened the week at $2.0975. It followed crude during the week and fell after mid-week. Gasoline opened Friday at $2.0116, a loss of 8.6 cents (-4.1%).