Global Oil / Gasoline / Natural Gas Tumbling
GLOBAL OIL PRICES IN STEEP DIVE: Massive fallout across global oil market this week. WTI oil powering above $90 per barrel a month ago just slashed below $75.50 per barrel today, a quick 15% plunge. Key WTI oil price support approaching $73.50 per barrel now in-the-gunsights. Alberta’s Western Cdn Select (WCS) oil price now cascading lower breaking $49 per barrel.
What’s the problem? Weak China demand, worsening economic data plus building U.S. gasoline stocks. China energy demand continues to weaken as their recession deepens. CHINA RECESSION APPEARS DEEPENING/ ECONOMIC DATA WORSENS. Also, U.S. gasoline supplies are now seasonally at a record high. Wholesale gasoline prices are sliding. Diesel fuel futures also under heavy selling pressure. Since late October, December diesel futures have tumbled from $3.20 per gallon to below $2.75 per gallon today, a 15% pullback. An exception, Western Cdn diesel fuel rack prices have been in a gradual climb over the past month. Expect Cdn diesel prices to peak and begin to decline possibly by next week. HIGHER WESTERN CDN DIESEL, BUT PRICES MAY BEGIN TO DECLINE SOON.
Natural gas also caught in the energy selloff . . . . December natural gas recently peaked around $3.62/MMBTU. Futures have now submerged below $3.10/MMBTU, also reflecting a 15% decline. The spot AECO natural gas price in southern Alberta (Suffield) has dropped 40 cents in the past two (2) weeks from $2.52 per gigajoule to below $2.10 per gigajoule today.
Bottomline . . . there is still further downside potential for crude oil, diesel fuel, gasoline and natural gas. Severe winter weather will eventually re-ignite spot nat gas prices. Crude oil and gasoline prices however are in-tough. Despite OPEC attempts, supply manipulation is in a losing battle with slowing global demand. OIL SUPPLY MANIPULATION NOW IN A LOSING BATTLE WITH SLOWING GLOBAL DEMAND. And an oil price drop could ignite infighting within the cartel. A story awaiting to be written . . . . Stay tuned to Errol’s Commodity Wire, Calgary