This week is one to remember – oil prices have seen $2/bbl price moves nearly every day this week! Just look at diesel markets which crashed 8 cents lower on Tuesday, gained all of that back on Wednesday, then lost another 8 cents on Thursday. And today, it’s almost back where it started! Your neck might be hurting from the volatility.
The downward turn this week came from continued focus on Europe’s behind-schedule vaccine rollout. With several EU countries announcing new lockdowns and global COVID cases rising, markets are a bit less starry-eyed about the prospects for a robust demand recovery. Although there are bright spots like the US, many other countries are struggling to curb new cases. And as we reviewed this week, demand problems anywhere cause lower prices everywhere.
The up-days were caused by two factors: market bulls and the Suez Canal blockage. Bulls have been buying the dip every time WTI crude falls below $60, continuously battling bearish news to keep prices afloat. The Suez Canal shutdown has also hampered global supply chains. Over a million barrels of crude commute the canal each day, so now oil flows have to re-route to meet demand. Although critical oil shortages are unlikely, the delays will add shipping costs and time, which is short-term supportive for fuel prices.
This Week in Energy Prices
Crude oil prices have been all over the map this week, though the overall result has been surprisingly small. Crude oil opened at $61.55, crashed below $57.50 on Tuesday, then climbed right back to where it started on Wednesday. Thursday saw another selloff, and on Friday prices opened at $58.58, a loss of roughly $3/bbl (-4.8%). It’s worth noting that Friday’s morning trading has been higher once again, so the week may moderate some of its losses.
Like crude oil, diesel prices have been all over the map. Opening the week at $1.8251, prices ping-ponged between $1.82 and $1.74 throughout the week. This morning, diesel opened at $1.7474, a loss of 7.8 cents (-4.3%), though currently prices are back where they began the week.
Despite all the volatility, gasoline prices are moving towards higher ground for the week. Gas prices opened the week at $1.9402, gave up 6 cents, then set new weekly highs on Wednesday. Although prices opened this morning at $1.9211, a 1.9 cent (-1.0%) loss, they are trading several cents higher than Monday’s opening price.