• Manic Monday Sees 22-25ct/gal Plunge in Gasoline and Diesel

  • Manic Monday Sees 22-25ct/gal Plunge in Gasoline and Diesel

    Today will be a trading day for the history books, and we have already seen
    sub-$30/bbl WTI; a $31.02/bbl transaction for Brent; and losses that at one
    point topped 25cts/gal for refined products. And that has all occurred ahead of
    a U.S. equities opening that suggests a 5% devaluation in most U.S. stocks.

    At 9:15 a.m. ET, April WTI was fetching $31.94/bbl, representing a loss of
    $9.34/bbl on the day, while Brent was down $10.06/bbl to $35.21/bbl. Both
    contracts caught some bids in the wee hours, although those bids may have come
    from traders taking quick profits on Sunday evening shorts. The market clearly
    hasn't determined whether this new production war from Saudi Arabia and Russia
    will exist for a matter of weeks, months or years, but price action does not
    suggest that anyone sees the maelstrom surviving for just 10 days or so.

    Refined products have dropped to where most U.S. wholesale numbers are likely
    to ease more than 20cts/gal today.

    April RBOB is a clear casualty, with $1.1535/gal reflecting a drop of
    23.55cts/gal. The overnight low for RBOB was just $1.0574/gal and a number of
    late 2020 months slipped below the $1/gal mark. The price carnage is sufficient
    so that all but a handful of states could conceivably see sub-$2/gal gasoline
    prices at the pump this month.

    Diesel bottomed out at $1.0799/gal for the April contract with a presstime
    number of $1.1742/gal reflecting a loss of 21.17cts/gal.

    Again, the next catalyst (positive or negative) could come with the opening of
    the NYSE and NASDAQ. The shaky economic backdrop is one of the three factors,
    together with the Saudi/Russia price war and the fear of coronavirus
    disease2019 (COVID-19) demand destruction that is influencing prices on this
    crazy morning.

    --Reporting by Tom Kloza, tkloza@opisnet.com; Editing by Michael Kelly,
    michael.kelly3@ihsmarkit.com



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