Oil traders fastened their seat belts Tuesday morning as President Biden announced the release of 50 million barrels of crude from the U.S. strategic stockpile. Japan, China, South Korea, India and Great Britain added sales as well in an unsuccessful attempt to hold fuel prices down.
Friday morning’s announcement by the World Health Organization of a new, highly mutative COVID-19 variant tanked oil prices much more dramatically.
Traders feared lockdowns would kill demand for transportation just as supplies increased -- a perfect storm for prices.
By midday Friday, West Texas Intermediate crude for January delivery traded at $68.50 per barrel, down $9 on the week, while gasoline dropped 30 cents per gallon. January unleaded gasoline was trading at $1.9850 before taxes per gallon, down from the previous Friday.
Stock indexes make U-turn
S&P stock index futures soared to an all-time high on Monday but made a classic reversal, closing lower.
Friday’s COVID-19 news added fuel to the fire, as conservative investors joined short-term speculators on the fire escape. Friday’s S&P was down 100 points on the week, while Dow futures lost more than 1,000 points.
Grains take back seat
Although their decline was muted compared to financial futures, wheat and soybeans had a bad week as well, dropping sharply Friday morning. March wheat was trading at $8.40 per bushel.
Walt Breitinger is a commodity futures broker in Valparaiso. He can be reached at (800) 411-3888 or www.paragoninvestments.com. This is not a solicitation of any order to buy or sell any market.