This week has seen relatively light trading action, with oil prices giving up some of last week’s gains. As oil prices celebrated the one-year anniversary of prices falling into negative territory, traders reflected on the current environment. Demand is much stronger than last year, though rebounding infection rates in India and Japan, among other countries, have put a damper on demand outlooks. Vaccine deployments will be necessary to curb rising infections; what’s worked well in the US now needs to be replicated worldwide.
Midweek inventory data reported by the EIA gave markets a lot to process. Although Cushing crude inventories fell, national crude stocks posted a surprise build. Gasoline demand was comparable to 2019 levels, yet inventories were slightly up. It was the type of report with something for both sides of the trade, resulting in little change in prices.
Global supplies continue to be an important consideration. This week, Libya declared force majeure at one of its ports, restricting crude exports. They also warned of production losses ahead if their central bank does not free up funds for infrastructure improvements. Conversely, the US and Iran made some progress towards removing sanctions, which would flood the market with millions of barrels of crude each day. With demand still uncertain, traders aren’t sure how to evaluate the constantly evolving supply/demand picture. Stay tuned – there’s plenty of opportunities for prices to surge higher or crash in the coming months.
This Week in Energy Prices
Crude oil prices started off the week at an opening price of $62.98 and rose again Tuesday. Wednesday through Friday however prices fell with an opening price on Friday of $61.65, a fall of $1.33 from Monday’s opening price of $62.98.
Today diesel opened with a price of $1.8633, a fall of $0.028 from Monday’s opening price of $1.8913. This week for diesel remained mostly unchanged throughout the week, however bringing some of the higher prices seen in the past two weeks.
On Friday, gasoline opened at a price $1.9840, resulting in a change of -$0.0544 from Monday’s opening price of $2.0384. Similar to diesel, gasoline prices remained mostly flat throughout the week, resulting in small changes day-to-day.