Crude Prices Correct After Six-Day Rally

Traders experienced a slight correction in crude prices on the New York Mercantile Exchange (Nymex) on Thursday, following a six-day rally that saw prices rise as high as $18.21/bbl. Despite the setback, oil prices remain in an upward trend, with many analysts expecting continued growth. However, the correction was attributed to buyers losing their nerve after a disappointing draw in crude inventories, which failed to meet the expected price spike.

Key Takeaways:

• Crude prices on the Nymex ended their six-day rally on Thursday, settling down 14 cents at $17.86/bbl.
• The correction was attributed to buyers losing their nerve after a disappointing draw in crude inventories, which failed to meet the expected price spike.
• Timothy P. Evans, an analyst with Pegasus Econometric Group, stated that too much speculative buying on Wednesday in anticipation of a sharp price spike had sent many traders "rushing to the exit."
• A 7.25 million bbl draw in crude inventories on July 26 sent prices skyrocketing 57 cents/bbl, but a more recent draw of 12 cents rise on Wednesday was deemed disappointing.
• Gasoline prices surged 0.59 cents to settle at 55.86 cents/gallon in the September contract, with near-month gasoline gaining almost 2 cents over the past week.
• The October crude/gasoline crack spreads widened to $4.40-$4.60/bbl, supporting the rise in gasoline prices.

Statistics:

• Crude prices on Nymex ended Thursday's session down 14 cents at $17.86/bbl.
• The daily low for crude prices on Thursday was 1 cent off at $17.85/bbl.
• Gasoline prices surged 0.59 cents to settle at 55.86 cents/gallon in the September contract.
• Near-month gasoline has gained almost 2 cents over the past week.
• October crude/gasoline crack spreads widened to $4.40-$4.60/bbl.

Sources:

• New York Mercantile Exchange (Nymex)
• Timothy P. Evans, Pegasus Econometric Group
• Sources (no date provided)