Crude oil was caught in a crossfire of bearish news yesterday including heightened concerns over trade tensions between the U.S. and China that has weighed on markets since November. The passing of a bill aimed at potentially drawing OPEC into anti-trust charges by the House of Representatives did not help either and as a result, WTI fell $1.37 a barrel to $52.64, while Dated Brent surrendered $1.06 to end the day at $61.63. The oil complex is now effectively back to trading levels of a week ago and in the case of WTI, recording its lowest for the month of February.
At the same time, refined products surrendered ground with gasoline coughing up over 3 cents a gallon and distillates reluctantly giving back nearly a cent and a half. But the news wasn’t all bad. Reports that Saudi Arabia made good on its pledge to reduce oil output, dropping 400,000 barrels of production daily in the month of January, likely prevented an all-out rout for crude and provided it timely support.
For drivers, there are early signals that the previous month’s overall recovery in petroleum prices is starting to make their presence felt at the nation’s pumps. According to GasBuddy’s Live Ticking Average, the cost to fill up is finally back over the $2.30 threshold, a place it hasn’t been since Boxing Day, December 26 with more gradual increases into next week. At $2.302 a gallon, pump prices are 3 cents a gallon higher than last week and 6.3 cents higher than last month. While the comparison to last year’s prices continues to narrow, the difference is still a sizeable 29.6 cents a gallon advantage for drivers this year. For diesel, the fuel that literally drives the global economy, at $2.928 the cost to fill up has risen fractionally over the week, but down 3.4 cents compared to last month. Still, diesel is a far cry from its Oct 13 high of $3.301 a gallon and 7.1 cents lower than last year on this same day when it chimed in at $2.999 a gallon.
The morning is seeing lighter trades with markets signaling a holding pattern on prices with crudes offering a slight uptick for Brent and a fractional decrease for WTI while the liquids are seeing a similar deviation of gasoline down marginally and diesel up a quarter of a cent. Short of any major developments, the trading session is most likely to end without consequence but for the week on a whole a net loss for WTI and slight gain for Brent with gasoline about the same and diesel off a couple of cents.