Oil prices have fallen 20% from their early October highs, begging the question of whether this is a reversal or merely a correction on the march higher. The answer to that question lies mostly with OPEC – the group has let production rise over the past few months to make up for Iran and Venezuela outages, and now must decide whether to continue upping output or apply the brake.
Prices have been declining relentlessly, falling each day since Oct 26 – a nine trading day streak, soon to be ten if current conditions prevail. For context, a 9-day losing streak has not occurred since 2014, and the last 10-day streak was in 1984!
Long losing streaks have at times heralded a prolonged bear streak (as occurred in 2014, when the 9-day streak came before prices plummeted from $100/bbl to $50/bbl in a few months), but they can also mark the last bearish streak during a bull run. The latter was the case in December 2009, when prices declined for 9 straight days after climbing from $40 to $80, falling to $70 before ultimately hitting $110/bbl a year later. To summarize – a long losing streak can be either bullish or bearish, so where they turn on Monday is anyone’s guess.
Prices in Review
As mentioned above, crude prices have been going through a long losing streak the last two weeks, and today’s activity does not seem to provide an exception. Crude oil began the week at $62.99 – a far cry from October’s $76/bbl high. Steady losses whittled the price down to just $60.75 this morning, a loss of $2.24 (-3.6%).
Diesel prices stood strongest this week, managing to eke out gains on Monday and Wednesday, but Thursday’s heavy losses put the weekly activity in the red. Prices began the week at $2.1963, and prices rose as high as $2.25 before dropping lower on Thursday. Diesel opened this morning at $2.1724, a loss of just 2.4 cents (-1.1%).
Gasoline prices saw heavier losses than diesel this week amid continued weakness. Gas prices began the week at a meager $1.6919, making tiny gains on Tuesday before falling the rest of the week. This morning gasoline prices opened at $1.6483, a loss of 4.4 cents (-2.6%).