By Dr. Nancy Yamaguchi
Oil prices surged on Tuesday. As the markets opened following the New Year’s holiday, prices hit levels that have not been seen for a year and a half. On Tuesday, WTI opened at $54.20/b. WTI spiked above $55/b for a time before a sell-off caused prices to collapse to a close of $52.33/b. The rest of the week saw prices gradually creeping back up above $53/b, and then above $54/b today if momentum lasts.
As the New Year begins, WTI has had some ups and downs, but prices have been robust overall. Several key OPEC countries are reportedly initiating their production cuts, including Kuwait, Oman, and Saudi Arabia. OPEC output is also being reduced significantly by unplanned outages in Nigeria, which is exempt from the OPEC pact.
However, Libya is also exempt from the cuts, and it plans a major boost in production from its newly reopened Sharara field in the south west. Bloomberg reported that Libya is planning to expand crude exports this month from its Zawiya port near Tripoli.
WTI crude prices opened at $53.73/b this morning, a 0.9% decrease from Tuesday’s opening of $54.20/b. Prices surged to highs above $55/b on Tuesday, though this spike did not last. WTI prices ranged from a low of $52.11 on Tuesday to a high of $55.24/b, also on Tuesday. This is a range of $3.13. Prices are $54.12/b this morning, $0.36 above opening, and if the current momentum persists, it looks like WTI will end the week close to $54/b. The end result will be a volatile week but one where prices end up roughly where they began.
Distillate prices opened Tuesday at $1.7313/gallon. They opened this morning at $1.6971/gallon, a drop of 2.0% (3.42 cents). Prices ranged from a low of $1.665/gallon on Wednesday to a high of $1.7647/gallon on Tuesday, an unusually large range of 9.97 cents. Prices are currently $1.7067/gallon, 1.25 cents above opening.
Gasoline RBOB prices opened Tuesday at $1.674/gallon. Today’s opening price of $1.6391/gallon was a drop of 2.1%, or 3.49 cents, for the week. Prices ranged from a low of $1.612/gallon on Thursday to a high of $1.7095/gallon on Tuesday, a large range of 9.75 cents. Prices have come back to $1.6489/gallon currently, 1.12 cents above the opening price.