Energy markets this morning appear to be awakening from their listless hibernation of late rallying with increases across the energy complex. Led by September WTI oil, which fell to an intraday low of $65.71 yesterday before recovering to $67.20 a barrel by day’s end, petroleum prices are posting strong numbers in the early trading session with WTI up a dollar to $68.20 a barrel, ICE Brent crude pushing over $73.80 a barrel as gasoline posts a solid 5.3 cent a gallon gain with diesel not far behind up 4 cents a gallon.
Remarkably, gasoline had also fallen through the $2 a gallon threshold at one point yesterday on the merc, but like oil, pared losses and has since risen by about a nickel. Diesel remains bulletproof and likely to cause headaches when the fall seasonal demand kicks into high gear, making today’s nearly 12 cent-a-gallon differential a bargain, compared to what lies ahead when distillate demand skyrockets.
Yesterday’s trades were driven lower by continued trade tensions and currency concerns with the markets also having to contend with a surging greenback, whose fate is diametrically opposed to oil and serves as a counter to higher crude prices given the U.S. currency is the imputed benchmark for global commodity prices.
For drivers who continue to benefit from stable summer prices, something not seen in 13 years, pump prices across the country look pretty much the same as they did last month with the national average sitting at $ 2.87 a gallon, according to GasBuddy’s Live Ticking Average. That put pump prices a cent higher than last week but with a cent of last month and still 53 cents a gallon higher than this day in 2017. As indicated, diesel continues is sunny ways with a 63 cent a gallon premium over last year, at an average today of $3.15 a gallon.
The day ahead will likely see traders focussed on a variety of reports and items, including OPEC’s monthly market outlook that scaled back global consumption to 98.83 million barrels a day for the year, lower July crude production from Saudi Arabia, Iran, Libya, Venezuela and the UAE, an eagerly anticipated API guesstimate on what the EIA weekly petroleum data will show tomorrow as well as ongoing concern for unplanned refinery outages in New Jersey and Washington State.
With reflection over the rising cost of shale oil production in the Permian given infrastructure limitations and human resource costs; dwindling Iranian oil and condensates output; and the continued drawdown of inventories at the Cushing hub; the day ahead looks to score a solid rise in values and a potential several day rally in energy commodity prices.