Fuels Market Watch 24

FUEL MARKETS TODAY – Market Overview

The pre-Christmas selloff continues. Over the past few years, stock markets have finished strongly in December, known as the “Santa Rally.” A stronger mythical being or superhero is needed this year. The Dow Jones Industrial Average took yet another nosedive yesterday, losing 464 points (1.99%) on top of the 352 points (1.49%) it shed the day before. Crude oil futures prices continued to sink. WTI (West Texas Intermediate) crude forward prices opened at $46.25/b today, a drop of $1.14 (2.41%) from yesterday’s opening price of $47.39/b. This is the fourth consecutive day that WTI prices have opened below $50/b. Gasoline and diesel forward prices also opened with losses today. Crude and product forward prices all have suffered heavy losses this week. This week will be one of red ink unless Santa Claus arrives early.

As of the time of this writing, WTI crude forward prices have collapsed by 11.3% for the week. Diesel forward prices are down by 6.6%. Gasoline forward prices are down by 9.4% for the week. All have headed down overnight and in early morning trades.

The Dow Jones Industrial Average took another nosedive yesterday, losing 464 points (1.99%) on top of the 352 points (1.49%) it lost the day before. When the Fed raised interest rates this week, it stated its belief that the U.S. economy was still strong. However, markets did not show complete faith. The health of the economy may become clearer when longer-term data become available, including third-quarter GDP and November consumer spending and confidence. But the current situation is complicated by fears of a government shutdown, unless President Donald Trump and Congress come to an agreement before midnight tonight on the battle over a border wall. Some traders are awaiting news of any possible deal today.

U.S. markets and U.S. allies were shaken by the abrupt resignation of U.S. Defense Secretary Jim Mattis. Secretary Mattis was a moderating influence on President Trump’s isolationist, America-First views. President Trump announced that he would pull U.S. troops out of Syria and plan a withdrawal from Afghanistan. Secretary Mattis, who valued traditional U.S. alliances, wrote in his letter of resignation that the President had the right to have a Secretary of Defense “whose views are better aligned with yours.”