Yesterday there were talks of a production cut by OPEC and Russia, causing an early, positive market reaction. Russian Energy Minister Alexander Novak made comments that Saudi Arabia was proposing production cuts of up to 5%, causing oil prices to rise about 5%. However, market analysts dismissed the credibility of the cut with some calling it “false hope” and some media sources reported that there were no plans for implementation of these cuts, causing the market to retreat. Ultimately, both WTI and Brent closed way below the day’s highs. OPEC has stated that no date has been set for its next meeting with non-OPEC producers.
In other news, the U.S. economy expanded at a slower pace in the fourth quarter. U.S. Commerce Department figures showed that gross domestic profit rose at a 0.7% annual rate and ended at a 2% gain. Growth has slowed as a result of continued low oil prices continued the negative impact of a stronger dollar on exports and slowing markets abroad. The first quarter of 2016 is expected to show stronger numbers.
Yesterday, WTI crude closed up $1.02/bbl to $33.22, gasoline closed up $0.0333/gal to $1.0790, and HO finished up $0.057/gal to $1.0309. As of 11:15 am EST, WTI is up $0.16 to $33.38, gasoline is up $0.0083 to $1.1086 and diesel is up $0.0167 to $1.0614