Yesterday, oil prices continued to rise over 4% despite an unexpected crude inventory hike. Investors are buying the dip, capitalizing on low prices in the hopes that prices will continue their march higher over the next few months. Rising prices are somewhat counter-intuitive, given yesterday’s bearish inventory data. Crude oil inventory levels rose Wednesday for the first time since May. While analysts expected over a 4.5-million-barrel decrease, inventory levels rose by 2.1 million barrels. On the other hand, diesel and gasoline stocks moved lower. Despite normalized refinery activity, demand is outpacing fuel supplies, draining inventories.
In other major news this week, we reported that the fuel driver shortage continues to deepen as high summer demand keeps markets stretched thin. Yesterday, the State of South Dakota – far removed from the normal threats of hurricanes and refinery outages – declared a state of emergency for petroleum deliveries. South Dakota Governor Noem waived federal hours of service requirements for fuel truck drivers in the state, overriding federal laws. The FMCSA commented that the decision is legal, given the emergency declaration. The ruling does require that petroleum companies allow “fatigued drivers” to rest, in order to prevent accidents.
This Week in Energy Prices
Today crude opened at a price of $71.71, a change of $0.22 from Monday’s opening price of $71.49. Crude was volatile throughout the entire week, with a large drop-off in price taking place between Monday and Tuesday. This week crude saw its lowest prices since June 1.
Today diesel opened at $2.1314, a change of $0.0303 from Monday’s opening price of $2.1011. This morning’s opening price of $2.1314 represented the highest opening of the week, however, prices remained mostly unchanged.
Today gasoline opened at a price of $2.2674, a change of $0.0258 from Monday’s opening price of $2.2416. Earlier in the week gasoline prices remained mostly unchanged until Wednesday, which saw the largest increase in prices.