Crude prices languished this week, opening lower four days out of five. Price rallies were short-lived and unenthusiastic, with WTI struggling to maintain levels of $48/b, and dipping as low as $47/b. Prices threatened to break through some technical supports that many analysts believe herald a coming crash. Yet prices of $47/b always elicited buying interest. The oil complex is in the midst of a rally as of the time of this writing, and WTI prices have once again regained the $48/b mark. However, it will take significant bullish news to extend the rally today, and without this, the week appears headed for another ending in the red.
WTI crude prices opened the week at $48.70/b. WTI opened this session at $47.67/b, a significant drop of $1.03, or 2.1%, from Monday’s opening. During the week, prices ranged from a high of $48.74/b on Tuesday to a low of $47.01 on Wednesday, a very narrow range of $1.73. Current prices are $48.07/b, up $0.37 from yesterday’s close.
Diesel prices opened Monday at $1.5117/gallon. Diesel opened this morning at $1.4883/gallon, a drop of 1.6%, or 2.34 cents, for the week. Prices ranged from a high of $1.536/gallon on Tuesday to a low of $1.4758/gallon on Wednesday, a price range of 6.02 cents. Prices currently are $1.501/gallon, a gain of 1.09 cents from Thursday’s close.
Gasoline prices opened Monday at $1.598/gallon. Today’s opening price of $1.5878/gallon was a drop of 0.6%, or 1.02 cents, for the week. Prices ranged from a low of $1.5784/gallon on Thursday to a high of $1.635/gallon on Tuesday, a range of 5.66 cents. Prices are $1.6005/gallon currently, up 1.09 cents from Thursday’s close.
The EIA’s weekly supply data showed another increase in crude inventories, a build of 4.954 mmbbls, which brought the total to 533.1 mmbbls. Gasoline stocks were drawn down by 2.811 mmbbls, and diesel inventories were drawn down by 1.91 mmbbls. The issue of burgeoning stockpiles kept prices down again this week. Early spring refinery maintenance typically brings an increase in crude inventories and a drawdown in product inventories, but the additions to crude stockpiles have been relentless this year.
Other bearish news accompanied the crude stock build. U.S. crude production continued to rise (to 9129 kbpd,) with another 20 kbpd added to domestic supply during the week ended March 17th. Crude exports dropped 167 kbpd, falling to 550 kbpd from 717 kbpd the week prior. Weekly average demand also dropped: apparent gasoline demand fell 54 kbpd, jet fuel demand fell 240 kbpd, and diesel demand fell 240 kbpd.
The bearish news greatly overshadowed the bullish news this week. The key price support came from OPEC, which remained committed to its production cut pact. The OPEC monitoring committee will meet in Kuwait this weekend to analyze compliance and the effectiveness of the cuts so far. OPEC has reported very high levels of compliance. This has been corroborated by independent analysts and international agencies. The International Energy Agency (IEA,) for example, calculated OPEC compliance at 91% last month, plus 44% compliance from the Non-OPEC participants. Global inventory levels have not yet fallen as expected, however, and OPEC has indicated that it is likely to extend the cuts beyond the June 2017 end date.