Gasoline and Crude Prices Slide on New York Mercantile Exchange

Strategic Insights -

Prices of gasoline and crude petroleum on the New York Mercantile Exchange fell on May 23, 1995, although analysts remain certain that prices will firm. The July futures contract for crude oil fell to $19.77 per barrel, a $0.07 drop, while June gasoline contracts fell to 66.15 cents per gallon, a drop of 0.31 cents. The 22-day oil workers' strike in Brazil has had little impact on US prices, but has affected European supply.

Key Takeaways:

  • The July futures contract for crude oil fell to $19.77 per barrel, a $0.07 drop.
  • June gasoline contracts fell to 66.15 cents per gallon, a drop of 0.31 cents.
  • The 22-day oil workers' strike in Brazil has had little direct impact on US prices, but has affected European supply.
  • Brazilian state shipping company Frota has chartered two tankers carrying 832,200 barrels of gasoline and gas oil from the United Kingdom and Northwest Europe.
  • European shippers are proving more reluctant to send cargoes of North Sea Brent toward the United States, as the transatlantic arbitrage has narrowed to a less-than-profitable $1.38 per barrel.
  • Industry sources are optimistic that prices will generally remain firm, with gasoline prices expected to stay above 66 cents per gallon.

Statistics:

  • $19.77 per barrel: price of July futures contract for crude oil.
  • $0.07: drop in price of July futures contract for crude oil.
  • 66.15 cents per gallon: price of June gasoline contracts.
  • 0.31 cents: drop in price of June gasoline contracts.
  • 832,200 barrels: amount of gasoline and gas oil chartered by Frota.
  • $1.38: transatlantic arbitrage per barrel.
  • $6.69 billion: July crude/gasoline crack spread on Nymex.
  • $7.50-$8 per barrel: forecasted price of July crude/gasoline crack spread on Nymex.
  • June 1: date when Exxon Corp.'s Baytown, Texas, catalytic cracker is expected to be up and running.
  • June 10: date when Citgo Petroleum Corp. plans to restart a cracking unit at its Lake Charles, La., refinery.

Sources:

  • "Crude prices on Nymex slide for second day in row," Washington Post, May 24, 1995.
  • "Brazil's oil strike hurt supplies," Nymex trader said, Washington Post, May 24, 1995.
  • "Brazil oil workers' strike continues," BBC News, May 24, 1995.