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Petroleum

Oil Prices Plummet on Nymex Amid Fundamental Weakness

Strategic Insights

— 2 min read

Oil prices took a significant hit on Thursday, as crude and product futures on the New York Mercantile Exchange (Nymex) continued their downward trend. The January futures contract for light, sweet crude tumbled 26 cents to settle at $16.73 per barrel, while February crude dropped 23 cents to $16.83 per barrel, and March fell 17 cents to $16.96 per barrel. The decline was attributed to a lack of fundamental news and holders of long positions driving the front-month spread further into contango.

Key Takeaways:

  • The January futures contract for light, sweet crude dropped 26 cents to settle at $16.73 per barrel, marking a significant decline for the month.
  • February crude dropped 23 cents to $16.83 per barrel, and March fell 17 cents to $16.96 per barrel, reflecting a continued downward trend.
  • The front-month spread was driven further into contango, with Nymex traders expecting initial support at $16.50 and major support at $16.42.
  • In London, the January futures contract for Brent crude expired at $15.87 per barrel, down 10 cents, while February Brent dropped 18 cents to a two-month contract low of $15.78 per barrel.
  • Higher North Sea crude exports in January are expected to total about 147 million barrels, up 6 million barrels from December.
  • Continuing concerns about the reformulated gasoline program canceled out the bullish effect of an American Petroleum Institute survey showing that gasoline inventories dropped 2.7 million barrels last week.
  • Nymex January gasoline futures lost 1.13 cents to settle at 51.52 cents per gallon, while February fell 0.93 cents to 50.95 cents per gallon and March dropped 0.82 cents to 51.29 cents per gallon.
  • Perceptions of insufficient distillate demand drove January heating oil down 0.76 cents to 48.78 cents per gallon, with February falling 0.68 cents to 49.07 cents per gallon and March dropping 0.60 cents to 49.05 cents per gallon.
  • January natural gas edged up 0.40 cents to $1.718 per million British thermal units after losing nearly 20 cents in the previous two days.

Statistics:

  • 26 cents: decline in the January futures contract for light, sweet crude.
  • $16.73: settlement price of the January futures contract for light, sweet crude.
  • 23 cents: decline in February crude.
  • $16.83: settlement price of February crude.
  • 17 cents: decline in March crude.
  • $16.96: settlement price of March crude.
  • 10 cents: decline in the January futures contract for Brent crude.
  • $15.87: settlement price of the January futures contract for Brent crude.
  • 18 cents: decline in February Brent crude.
  • $15.78: settlement price of February Brent crude.
  • 147 million barrels: total expected North Sea crude exports in January.
  • 6 million barrels: increase in North Sea crude exports from December.
  • 2.7 million barrels: decline in gasoline inventories last week, according to the American Petroleum Institute.
  • 1.13 cents: decline in Nymex January gasoline futures.
  • 51.52 cents per gallon: settlement price of Nymex January gasoline futures.
  • 0.76 cents: decline in January heating oil.
  • 48.78 cents per gallon: settlement price of January heating oil.
  • 0.40 cents: increase in January natural gas.
  • $1.718 per million British thermal units: settlement price of January natural gas.

Sources:

  • New York Mercantile Exchange (Nymex)
  • International Petroleum Exchange (IPE)
  • American Petroleum Institute

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