Markets saw a large downward reversal yesterday after gaining over $4/bbl in 3 days. Even with a hefty loss of $2/bbl yesterday, prices are still positive overall this week. Crude is currently trading at $74.77, a gain of 44 cents.
Fuel prices both gave up a fair share of this week’s gains yesterday, though both are still trading net-higher this week. The oil complex is going back and forth between positive and negative territory this morning. Diesel prices are currently trading at $2.4022, a small gain of 0.3 since yesterday’s close. Gasoline prices are $2.1000, virtually flat to yesterday’s closing price. .
Although oil markets have posted more bearish than bullish headlines lately, yesterday’s sell-off doesn’t quite leave the feeling that the bears are winning. Profit-taking is a common response to rapid gains in oil prices. The downturn also came after the September jobs report was released showing an uptick in wages and a 50-yr low in unemployment. The labor report caused bond yields to rise (a sign of higher inflation), which in turn strengthened the dollar and caused commodities and financial markets to turn lower.