WTI Crude finished the week lower as the coronavirus pandemic continues to weigh on the economy. A recent surge in cases across the country caused a rollback of reopening plans and rekindled fears of demand concerns in the crude market.
In inventory news, a large surprise draw of 10.6 MMbbls reported by the EIA barely moved the market. The draw originated from rising refinery utilization, increased demand in products, and a sharp decline in imports to the Gulf Coast. Positive news this week has been overshadowed by concerns surrounding the pandemic.
The Fed this week has done its part to spur the economy by keeping rates low and continuing to support the country during this challenging time. Fed Chair Powell commented that Congress needs to do its part by agreeing on a stimulus package to bolster the economy. Time is running out to reach an agreement as the August 7 recess approaches. Despite the Fed’s economic support, the US dollar shrank to two-year lows, providing upward price pressure for commodities markets.
Prices in Review
WTI Crude opened the week at $41.26. It followed a choppy path through the week, closing well below it’s opening level. Crude opened Friday at $40.34, a loss of 92 cents (-2.2%).
Diesel opened the week at $1.2563 and generally followed crude throughout the week. Diesel opened Friday at $1.2235, a loss of 3.3 cents (-2.6%).
Gasoline opened the week at $1.2848. The product demonstrated a more pronounced downward trend throughout the week. Gasoline opened Friday at $1.2370, a loss of 4.8 cents (-3.7%). With the August futures contract expiring today, expect to see lower NYMEX prices on Monday as summer spec gasoline requirements phase-out, though these won’t reach the physical market for a few weeks.