Crude Oil Prices Plummet as Investment Funds Take Profits

Strategic Insights -

Investment funds took their profits on West Texas Intermediate (WTI) crude oil futures, causing prices to plummet as the contract for July delivery expired. WTI crude oil futures for July delivery expired at $20/bbl, while August contracts may be bid up by investors from their present mark of $19.71. The decline in prices is a result of investment funds taking their profits, rather than a decrease in demand or supply. The sharp decline in crude oil prices will have a ripple effect on the prices of refined products.

Key Takeaways:

  • WTI crude oil futures for July delivery expired at $20/bbl on June 20, 1994.
  • August WTI crude oil futures may be bid up by investors from their present mark of $19.71.
  • Investment funds took their profits on previously soaring WTI crude oil futures values, causing prices to plummet.
  • Heating oil futures were down 0.55 cents to 51.47 cents/gallon.
  • Natural gas futures increased 4.1 cents to $2.126/MMBtu.
  • The 3-2-1 crack spread on July futures -- two gasoline contracts plus one heating oil contract minus three WTI contracts, divided by three -- crashed to an all-time low of $1.73/bbl.
  • Wholesale refined products prices soared, with unleaded regular up 1.15 cents to 59.65 cents/gallon and premium up 1.18 cents to 68.49 cents/gallon.
  • Midwest regular jumped 1.26 cents to 60.72 cents/gallon and premium 1.31 cents to 68.65 cents/gallon.

Statistics:

  • WTI crude oil futures for July delivery expired at $20/bbl on June 20, 1994.
  • August WTI crude oil futures may be bid up by investors from their present mark of $19.71, a decline of $0.80/bbl.
  • Heating oil futures dropped 0.55 cents to 51.47 cents/gallon, a decline of 1.92% from the previous day.
  • Natural gas futures increased 4.1 cents to $2.126/MMBtu, a gain of 1.97% from the previous day.
  • The 3-2-1 crack spread on July futures crashed to an all-time low of $1.73/bbl, a decline of 60.45% from the previous day.
  • Wholesale refined products prices soared, with unleaded regular up 1.15 cents to 59.65 cents/gallon, a gain of 1.96%.
  • Premium gasoline at the Gulf Coast slipped to 4 cents/gallon over futures from 5 cents/gallon.

Sources:

  • The Oil Daily
  • Computer Petroleum Corp.
  • West Texas Intermediate (WTI) crude oil futures prices
  • August North Sea Brent futures prices
  • Spot August WTI at Cushing, Okla. prices
  • Imported crudes prices
  • Russian Urals prices
  • Refined products prices