Week in Review

The crude market was up for the week.  It started the week on an upward trajectory on trade news details.  By mid-week easing trade tensions and macroeconomic news continued to drive markets higher.  EIA inventory numbers were also bullish when compared to the API numbers and those numbers and positive trade sentiment helped to lift markets to close out the week.

Prices in Review

WTI Crude opened the week at $59.87. It had a positive trajectory through out the week.  On Friday crude opened at $61.11, a gain of $1.24 (2.1%).

Diesel opened the week at $1.9813.  It generally followed crude through the week.  Diesel opened Friday at $2.0307, a gain of 4.9 cents (2.5%).

Gasoline opened the week at $1.6586.  It was relatively flat to start the week but picked up by mid-week.  Gasoline opened Friday at $1.7061, a gain of 4.8 cents (2.9%).

Week in Review

The crude market was up for the week.  It started the week relatively unchanged on little news, but as mid-week came around, the markets fell on bearish inventory numbers.  On Wednesday, prices recovered from session lows on positive trade sentiment and the markets closed the week higher on news of a phase one trade deal agreed to by Trump although not yet confirmed by China.

The president signing off on the agreement will officially delay the round of tariffs scheduled for Sunday.  Even with a phase one trade deal in place, the deal could leave tariffs on many goods and would not address major concessions Trump has sought, such as unrestricted access for US companies.  China’s lack of response to the news of the agreement suggests that China and the US are still struggling to come to a compromise on the details of a broader deal.

Prices in Review

WTI Crude opened the week at $59.11. It was flat until mid-week when trade news began to lift the market.  Crude opened Friday at $59.36, a gain of 25 cents (0.4%)

Diesel opened the week at $1.9547.  It fell mid-week on inventory numbers but closed the week higher on trade news.  Diesel is trading higher on Friday morning.  Diesel opened Friday at $1.9553, a fractional gain.

Gasoline opened the week at $1.6475.  It was up and down all week – dropping mid-week on inventory news and recovering on trade news.  Gasoline opened Friday at $1.6325, a loss of 1.5 cents (-0.9%).  It is trading higher early Friday morning.

Week in Review November 8, 2019

Crude markets were up for the week.  Positive sentiment regarding trade talks between the US and China overshadowed bearish inventory news this week.  Agreements between the two countries to cancel tariffs in different phases was the major market driver to close out the week.

Mid-week news from the EIA regarding a larger-than-expected crude build moved markets lower on Wednesday, but the crude market rebounded on Thursday on positive trade news.  Markets are moving lower early on Friday as we see profit taking among traders.

Prices in Review

WTI Crude opened the week at $56.41.  The market followed news on inventory and China throughout the week to remain relatively flat.  Crude opened Friday at $57.08, a gain of 67 cents (+1.2%).  The market appears to be giving back those gain in early trading on Friday.

Diesel opened the week at $1.9411.  It was flat until mid-week when it started a downward trajectory.  Diesel opened Friday at $1.9191, a loss of 2.2 cents (-1.1%).

Gasoline opened the week at $1.6558.  It more closely followed diesel than crude through the week.  Gasoline opened Friday at $1.6399, a loss of 1.6 cents (-1.0%).

Week in Review – October 11, 2019

crude Pricing November 2019

The crude market was up for the week.  The big driver for the week was positive sentiment around US-China trade talks.  Some reports suggest that the Chinese would be willing to accept a partial trade deal with the US – possibly increasing annual purchases of agricultural products in order to secure an interim trade deal with Washington.  Trade talks began yesterday, and markets are hopeful. Later in the week, OPEC’s leader declared the organization’s commitment to balancing markets in 2020, giving traders confidence that prices may not fall much lower next year even amid economic concerns.

The EIA reported mid-week that crude stock had a larger-than-expected build.  Counter to that, however, were larger-than-expected draws in refined products.  With IMO 2020 around the corner, some are viewing the drawdown in diesel inventories as evidence that markets will indeed grow tighter over the coming few months. Many analysts have predicted higher oil prices due to IMO 2020, with the boldest prediction, from former presidential energy advisor Phillip Verleger, heralding $200/bbl oil within a few months.

Prices in Review

WTI Crude opened the week at $52.69. After losses through mid-week, markets have closed the week higher.  Crude opened Friday at $53.88, a gain of $1.19 (2.3%).

crude Pricing November 2019

Diesel opened the week at $1.8908. It followed crude closely through the week.  Diesel opened Friday at $1.9344, a gain of 4.4 cents (2.3%).

USLD November 2019

Gasoline opened the week at $1.5706.  It followed crude through the week.  Gasoline opened Friday at $1.6202, a gain of 5.0 cents (3.2%).

gaosline November 2019

Week in Review

It’s been a while since we wrote our regular “Week in Review” article, with so much to write about hurricanes and recovery. There’s certainly more to come on the lingering impacts of the hurricane, but for now we’re excited for things to start returning to normal. On Monday night this week, Tom Kloza from OPIS wrote, “Today was the first day in perhaps three weeks where some trading companies either expressed boredom or confidence that some normalcy had returned to markets.” From a fuel delivery perspective, this week certainly was the first time in a long time that markets bore any resemblance to “normal.” While normal operations haven’t resumed in every market, we’re much closer than we were a week or two ago.

Crude prices this week have been fluctuating on either side of $50 this week, cyclically moving up and down each day. The only day with steady gains was Wednesday, which saw support from an EIA report showing a general return to normal.  Prices traded in a very narrow band of $49.19 to $50.81, just a $1.62 range. Markets could be affected later today by OPEC if the organization makes any announcements about deepening production cuts.

Diesel had a strong week, surging past $1.80 on Wednesday following a 5.7 million-barrel (MMbbl) stock draw, far more than the 1.6 MMbbl draw expected by traders. Diesel prices have been pushed higher by three factors – increased disaster response demand following the hurricanes, agricultural demand for the fall harvest, and cooler weather increasing demand for heating oil. On that last one, I’m just taking the Weather Channel’s word – it was 90° outside Mansfield’s office yesterday, but Montana and Wyoming have already seen their first snow storm of the year!

Gasoline has been the biggest loser this week, shedding five cents throughout the week before bouncing back yesterday to regain some losses. Prices began the week at $1.6615, and have ranged from $1.6783 to $1.6205 this week. Prices are now within a penny of where they began the week, but fortunately for consumers remain a bit lower.

Market-moving news has been light this week. Markets continue to focus on hurricane recovery, though they’ve slowly moved their attention to other things. OPEC is meeting today to determine whether to deepen production cuts by 1%. Some members are in favor of the measure, while others have called it premature. We’ll see what happens.

As we noted earlier this week, gasoline basis levels (the difference between regional fuel prices delivered today and NYMEX prompt month prices) have mostly returned to normal, helping to bring prices back to pre-storm levels. Gasoline basis levels across the board rose following Hurricane Harvey, with the Gulf Coast seeing basis rise 40 cents. Some regions, notably Chicago and NY Harbor, have now dropped a bit below pre-storm basis levels. Regional diesel basis levels have also returned to normal, though they only had to fall back from 5-10 cent increases in most markets. However, the underlying NYMEX prices remain high resulting in diesel prices continuing to rise despite the decline in basis levels.

Market Condition Report - Disclaimer
The information contained herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Furthermore, no responsibility is assumed for use of this material and no express or implied warranties or guarantees are made. This material and any view or comment expressed herein are provided for informational purposes only and should not be construed in any way as an inducement or recommendation to buy or sell products, commodity futures or options contracts.

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