Crude Oil Prices Decline

Crude oil prices have experienced a significant drop, with West Texas Intermediate (WTI) futures falling within 10 cents of their previous closing mark before the Hamas bombings in Israel three weekends ago.

At around 12:15 p.m. ET, December WTI was trading at $83.05 per barrel, down $2.49, while January WTI saw a decline of $2.35 at $82.35 per barrel.

December Brent also faced a decrease, reaching $88.02 per barrel after a decline of $2.46, while January Brent fell $2.45 to $86.75 per barrel.

Experienced traders expressed surprise at the 3% drop on Monday and noted that the effects of this decline might not be fully reflected until global refining capacity recovers in about three weeks.

Today’s decline in crude oil futures occurs alongside a 0.5% decrease in the value of the dollar. Traditionally, this kind of weakness in the greenback may encourage buying across various commodities, including oil.

As a result of the weak crude benchmarks, refined products are also experiencing losses after gains were made late last week. Gasoline and diesel prices in November and December are currently facing potential losses of around 8 cents per gallon.

November RBOB will expire on Tuesday and is currently trading 7.53 cents per gallon lower at $2.2372/gal. While cash markets are generally following this downward trend, the Pacific Northwest and Chicago are seeing losses of around 3.5-4.5 cents per gallon.

The declining wholesale gasoline prices have led to an exceptionally profitable month for gasoline marketers. This October may see average rack-to-retail margins of 50 cents per gallon or better, a rare occurrence.

Diesel prices tend to dip until The Energy Information Administration and the American Petroleum Institute release their statistics. Additionally, the colder-than-seasonal October weather hasn’t been beneficial for the overall distillate market. On Monday, November ULSD saw a decrease of 8 cents per gallon, trading at $2.9719/gal, while December was quoted at $2.8871/gal, reflecting a loss of 8.16 cents per gallon.