After the surge in prices on Friday the market decided to forfeit its gains yesterday, dropping $.06 cents on diesel. Judging by the continued pressure on prices from the bearish news we have encountered since the beginning of the New Year, you would think the market would continue to fall. The one news exception that pushed prices up, Winter Storm Jonas, is now gone and there is not much news left to strengthen the market, right? Wrong. The market is looking to settle up an estimated $.04 on diesel, +$.0170 on gas, and +$1.25 on crude.
An OPIS report this morning contributed to some of the upward movement, stating: “One of the reasons for the gains this morning was as a result of OPEC continuing to call for production cuts. However, the key to such a deal is Russia, and so far that country will not cooperate. Iraq's oil minister did say there was likely some flexibility for a deal between OPEC and non-OPEC members.”
Key market shifters:
- Phillips66’s 58,000 bpd Billings, MT refinery shut its 21,000 bpd catcracker, down time is expected to be 30 days.
- China’s stock market fell another 6% yesterday to a 14 month low (down 22% so far in 2016)
- Russia reclaims position as top crude oil supplier to China in December
- Credit Suisse slashes its 2016 Brent and WTI price forecasts by 44% and 33% respectively
- Kuwait’s OPEC governor expects oil prices at $40-$60/bbl from next year until 2020
- Goldman Sachs trims its 2016 Brent estimate by $5/bbl to $45/bbl