Oil prices shed nearly a dollar per barrel yesterday, bringing the total losses over the past two sessions to $3/bbl. After last week’s strong rally, that loss isn’t surprising; trader profit-taking is a normal response, causing prices to dip after a rally. Last week, oil bulls bought any dips, consistently pushing prices higher. Now, it seems the bulls have taken at least a momentary pause – the question is how quickly they will return.

Yesterday’s losses are noteworthy given conditions over the weekend. Oil soared from $45/bbl to over $60/bbl on vaccine optimism and Congressional debates over a $1.9 trillion stimulus package. This weekend, a third vaccine – the single-shot Johnson & Johnson vaccine – was approved by the FDA, and the US House of Representatives passed the stimulus bill and sent it to the Senate. Typically, those factors would suggest a bull rally of at least a few dollars for crude oil; prices fell instead. With OPEC considering as much as 1.5 MMbpd combined supply increases, any optimistic demand data seems premature. Moreover, prices rose due to the US deep freeze, and that effect is now fading.

This morning, crude oil prices are trading flat, shrinking back from moderate gains seen earlier in the day. Crude oil is trading at $60.73, hardly changed from Monday’s closing price.

Fuel prices are also trading flat/higher. Diesel is seeing the largest gains, up half a cent to $1.8244. Gasoline prices are $1.9446, up 0.2 cents.