Crude Prices Plummet to $30 for First Time Since August

Strategic Insights -

Crude futures have declined for the fourth day in a row, with the front-month New York Mercantile Exchange (Nymex) crude settlement dropping below $30 for the first time since early August. The lack of a resolution in the dispute over December pricing of Iraqi crude exports has not had the expected impact on the market, which instead seems to be driven by rumors of an imminent compromise. Meanwhile, other market factors, such as pledges from the US Department of Energy and the International Energy Agency, have helped to stabilize prices.

Key Takeaways:

  • Crude futures have plummeted for the fourth day in a row, with a remarkable decline of $1.69 in New York on Tuesday alone.
  • Front-month New York Mercantile Exchange (Nymex) crude has settled below $30 for the first time since early August.
  • The dispute over December pricing of Iraqi crude exports has not had the expected impact on the market, with prices instead influenced by rumors of an imminent compromise.
  • Pledges from the US Department of Energy, the International Energy Agency, and other Opec producers have helped to stabilize prices and quell the sort of rally that a supply interruption was expected to trigger.
  • The market remains firmly backwardated despite recent reports of weak short-term buying interest.
  • Crude stocks fell 3.7 million bbl, contrary to expectations of a build.
  • Refinery utilization rose 1.2 percentage points to 93.0% of capacity.

Statistics:

  • Crude futures declined by $1.69 in New York on Tuesday alone.
  • Front-month Nymex crude settled at $29.53/barrel, the lowest level since early August.
  • Brent crude lost $1.55 on the International Petroleum Exchange to settle at $27.79/bbl.
  • Crude stocks fell 3.7 million bbl, with a build in gasoline and distillate inventories.
  • Refinery utilization rose 1.2 percentage points to 93.0% of capacity.
  • Heating oil futures fell 3.18¢ to 97.66¢/gallon.
  • Gasoline prices plunged nearly 4¢ to 76.22¢/gallon, a four-month low.
  • Natural gas prices reached the $17/million Btu level at the New York city gate.

Sources:

  • "Crude Prices Decline for Fourth Day in a Row, Plunge to $30 for First Time Since August" by Katherine Spector, Andrew Ware, and Jon B. Davis. No specific date given.
  • Salomon Smith Barney meteorologist Jon B. Davis quoted in the article.