Energy markets held their ground yesterday despite a down mood on the equities markets which saw the Dow Jones lose nearly 800 points on the day as short-term interest rate yields suggested, for some analysts, that a recession could be in the offing. Renewed concern that the U.S. is serious about imposing tariffs on China, should negotiations between the world’s two largest economies, also giving investors cause for pause, allowing WTI to manage a 30-cent gain on the day to $53.25 a barrel while Dated Brent grabbed a 39 cent move up to $62.08.
The fuels markets too saw a similar unenthusiastic sub-penny gain for gasoline, while diesel managed to pick up a little more than a cent in a day that appeared to be awaiting clearer evidence from OPEC and Russia towards formalizing a production cut in oil, expected to be clarified beginning tomorrow at the cartel’s gathering in Vienna. Given today’s day of mourning in the U.S. for the passing of President George WH Bush, commodities markets are closed with only electronic trades, movements are not to be taken at face value. Advance speculation on what OPEC and non-OPEC producers decide tomorrow may prove inaccurate and merely supposition, as rumors among observers range from a 1.3 million barrel a day cut, contradictory comments by the Saudi Oil Minister that cuts are not needed at this time to a NOPEC/OPEC agreement to settle on steep cuts until the end of 2019. Whatever the decision, tomorrow and Friday’s markets will be anything but dull. Even an expected build in the week’s EIA inventory for oil and refined products is likely to lead to a wild few days as the end of the week approaches.
For drivers, the news continues to be promising and indeed affordable. According to GasBuddy’s Live Ticking Average, median pump prices continue their descent and today stand at $2.443 a gallon, down 6.3 cents versus last week and a whopping 29.5 cents a gallon below prices last month. Unlike diesel, gasoline is now 3.6 cents a gallon lower than on this same day last year, while the fuel that underpins transport at $3.137 still holds a 29.1 cent a gallon premium over last year’s prices.
A quiet day is therefore expected with results favoring a slightly negative outcome in electronic trading and with the promise that Thursday and Friday trades will be nothing short of volatile as conflicting data is considered in earnest.