Prices of Petroleum and Gasoline Futures Plummet Amid Rumors and Market Volatility

Strategic Insights -

Prices of petroleum and gasoline futures dropped sharply on Monday, August 22, 1994, as commodity funds made programmed sales and rumors spread that a prominent refiner would reduce petroleum held in storage. West Texas Intermediate for September delivery fell by 71 cents to $16.87/bbl, while natural gas futures declined by 6.2 cents to $1.612/MMBtu on the New York Mercantile Exchange.

Key Takeaways:

  • The price of West Texas Intermediate for September delivery dropped by 71 cents to $16.87/bbl, a significant decline in a single day.
  • Unleaded regular gasoline futures for September delivery plunged by 2.75* per gallon ($1.16/bbl) to 51.45* per gallon on the New York Mercantile Exchange.
  • Oil companies slashed wholesale prices of unleaded regular, with prices ranging from 1.11* to 63.68* per gallon, according to The Oil Daily and Computer Petroleum Corp.
  • October West Texas Intermediate declined by 64* to $16.90, and October North Sea Brent futures fell by 54* to $15.76/bbl.
  • In Nigeria, fewer than 10% of 100,000 striking oil workers returned to their jobs, despite an offer by the government to pay seven weeks of back wages.
  • The military rulers arrested union leaders and leaders of the country's pro-democracy movement, including the man who led Nigeria's drive for independence from Britain.
  • The disruption of natural gas supplies to an electric generator temporarily shut down the Forcados tanker terminal, one of Nigeria's largest oil export ports.

Statistics:

  • West Texas Intermediate for September delivery fell by 71 cents to $16.87/bbl.
  • Unleaded regular gasoline futures for September delivery slid by 2.75* per gallon ($1.16/bbl) to 51.45* per gallon.
  • Oil companies lowered wholesale prices of unleaded regular by 1.11* to 63.68* per gallon.
  • October West Texas Intermediate declined by 64* to $16.90.
  • October North Sea Brent futures fell by 54* to $15.76/bbl.
  • Spot Dated Brent plummeted by $1.01 to $15.04/bbl.

Sources:

  • The Washington Times, August 22, 1994.
  • The Oil Daily, in cooperation with Computer Petroleum Corp.
  • The International Petroleum Exchange.
  • The New York Mercantile Exchange (Nymex).
  • Reuters, August 22, 1994.