Markets retreated during the week October 23-30, with U.S. cases of COVID-19 surging to alarming new highs. Not only does the U.S. continue to have the highest number of COVID-19 cases in the world, but its 7-day moving average of new cases is soaring, and it also is the highest in the world. Oil prices continue to slide. On Friday, October 30, WTI crude futures prices opened at $36.07 a barrel—the lowest market opening in approximately five months. WTI futures sank below $36 a barrel, closing the week at $35.79 a barrel. The prior week, people in search of good news riveted on FDA approval of the antiviral remdesivir. Moreover, initial unemployment claims finally made a significant downward move, which continued this week. The oddments of good news during the week, however, were overwhelmed by the sustained surge of COVID-19, which already in some areas is overtaxing hospitals.
The Dow Jones Industrial Average last week dropped Monday (-650.19), Tuesday (-222.19) and Wednesday (-943.24) before creeping back up on Thursday (+139.16) Friday brought another stock market loss, with the Dow Jones falling by -157.51. For the week from Monday through Friday, the Dow Jones Industrial Average lost 1,183.78 points. The energy sector is slumping. ExxonMobil posted a loss of $680 million in the third quarter, and Chevron posted a loss of $207 million. Both companies are cutting jobs. The oil complex finished awash in red ink during the week.
COVID-19 cases continue to rise, with curve-flattening reversed in many areas. Deaths are approaching 1.2 million. The Johns Hopkins Coronavirus Resource Center reports that global cases of COVID-19 stand at 46,382,791, with 1,198,717 deaths. Cases in the U.S. have now surpassed 9 million, standing at 9,187,062. U.S. deaths attributed to the disease have reached 230,865. The U.S. is in the grips of another surge, with yet another increase in the latest seven-day average of new confirmed cases. At this point, there is no state in the union that can claim to have the disease under control. New infections shattered old records this week. The COVID Tracking Project reported 88,452 new cases on Wednesday, 97,080 new cases on Thursday, and 90,058 new cases on Friday. These are the highest daily totals ever recorded. Across the Atlantic, cases are rising in France, the U.K., Belgium, Italy, the Netherlands, Germany, Spain, Russia, Ukraine, Czechia, Romania, Poland and Switzerland. Lockdowns are being re-launched in several countries.
Initial weekly unemployment claims continued to fall last week. According to data collected by the Department of Labor, initial claims totaled 751,000 during the week ended October 24, down by 40,000 from the prior week’s upward-revised figure of 791,000. Initial weekly claims finally subsided below the one-million mark at the end of August, but they had been stuck stubbornly above 800,000 until just the past two weeks. Prior to the pandemic, initial claims were typically 200,000–220,000 each week. During the week of March 28, initial jobless claims skyrocketed to hit a peak of 6,867,000. From that peak, initial jobless claims fell for 15 weeks. July brought a setback, and claims rose again. During the week ended August 8, claims finally fell below one million, but they were not able to sustain the downward trend. During the 32 weeks since U.S. states began to issue shelter-in-place orders, over 66 million Americans have filed initial jobless claims. Some are at the point where benefits are running out.
Supply, demand and inventory data will be influenced this week by Hurricane Zeta, which made landfall Wednesday as a Category 2 storm in already-battered Louisiana. The fast-moving storm hit Mississippi, Alabama and Georgia also, before moving on to South Carolina and North Carolina. At the high point, over 2.6 million customers were without electrical power.
WTI crude futures prices opened at $36.07 a barrel today, sharply down by $4.54 a barrel (11.2%) from last Friday’s open of $40.61 a barrel. WTI futures prices continued to languish on Friday, closing the week at $35.79 a barrel. Between market opening on Friday October 23 and market closing on Friday October 30, WTI crude prices finished $4.82 in the red. Our weekly price review covers hourly forward prices from Friday, October 23 through Friday, October 30. Three summary charts are followed by the Price Movers This Week briefing, which provides a more thorough review.
Source: Prices as reported by DTN Instant Market
Gasoline Prices
Gasoline futures prices opened at $1.0264 a gallon Friday October 30 on the NYMEX, compared with $1.1457 a gallon last Friday. This was a collapse of 11.93 cents (10.4%). The beginning of COVID-19 shelter-in-place programs in March brought a crippling collapse of nearly 87 cents per gallon, but prices gradually crept back up in April and May. October is bringing a price retreat. U.S. average retail prices for gasoline declined by 0.7 cents to average $2.143/gallon during the week ended October 26. Retail prices reclaimed the territory above $2 per gallon during the first week of June. Gasoline futures traded on Friday in the range of $1.0054/gallon to $1.0362/gallon. Between market opening on Friday October 23 and market closing on Friday October 30, gasoline futures prices finished 11.35 cents in the red. Prices at market closing on Friday were $1.0322/gallon. Prices continue to weaken, and gasoline futures opened at $1.0215/gallon on Monday November 1.
Source: Prices as reported by DTN Instant Market
Diesel Prices
Diesel opened on the NYMEX today at $1.0854/gallon, down significantly by 8.11 cents, or 7.0%, from last Friday’s open of $1.1665/gallon. U.S. average retail prices for diesel eased by 0.3 cents per gallon during the week ended October 26 to average $2.385/gallon. Diesel prices generally have weakened this year, missing some of the earlier price recovery seen in crude and gasoline markets. On Friday October 30, diesel futures contracts traded in the range of $1.0653-$1.097/gallon. The market closing price was $1.0859/gallon. Between market opening on Friday October 23 and market closing on Friday October 30, diesel prices finished 8.06 cents in the red. On Monday, November 2, diesel futures prices fell again to open at $1.074/gallon.
Source: Prices as reported by DTN Instant Market
WTI Crude Prices
WTI crude futures prices opened at $36.07 a barrel today, down sharply by $4.54 a barrel (11.2%) from last Friday’s open of $40.61 a barrel. Demand fears abound with the alarming increase in COVID-19 cases, at home and abroad. U.S. cases are surging faster than anywhere else in the world. On Friday, WTI crude traded in the $35.21–$36.60 a barrel range. WTI futures prices could not sustain the $36-a-barrel level, closing the week at $35.79 a barrel. Between market opening on Friday October 23 and market closing on Friday October 30, prices finished $4.82 in the red. WTI futures prices have not been steadily below $36 a barrel since May. Prices continue to weaken, and WTI futures opened at $35.24 a barrel on Monday November 1.
PRICE MOVERS THIS WEEK: FULL BRIEFING
Markets retreated during the week October 23-30, with U.S. cases of COVID-19 surging to alarming new highs. Not only does the U.S. continue to have the highest number of COVID-19 cases in the world, but its 7-day moving average of new cases is soaring, and it also is the highest in the world. Oil prices continue to slide. On Friday October 30, WTI crude futures prices opened at $36.07 a barrel—the lowest market opening in approximately five months. WTI futures sank below $36 a barrel, closing the week at $35.79 a barrel. The prior week, people in search of good news riveted on FDA approval of the antiviral remdesivir. Moreover, initial unemployment claims finally made a significant downward move, which continued this week. The oddments of good news during the week, however, were overwhelmed by the sustained surge of COVID-19, which already in some areas is overtaxing hospitals.
The Dow Jones Industrial Average dropped Monday (-650.19), Tuesday (-222.19) and Wednesday (-943.24) before creeping back up on Thursday (+139.16.) Friday brought another stock market loss, with the Dow Jones falling by -157.51. For the week from Monday through Friday, the Dow Jones Industrial Average lost 1,183.78 points. The energy sector is slumping. ExxonMobil posted a loss of $680 million in the third quarter, and Chevron posted a loss of $207 million. Both companies are cutting jobs. The oil complex finished awash in red ink during the week.
COVID-19 cases continue to rise, with curve-flattening reversed in many areas. Deaths are approaching 1.2 million. The Johns Hopkins Coronavirus Resource Center reports that global cases of COVID-19 stand at 46,382,791, with 1,198,717 deaths. Cases in the U.S. have now surpassed 9 million, standing at 9,187,062. U.S. deaths attributed to the disease have reached 230,865. The U.S. is in the grips of another surge, with yet another increase in the latest seven-day average of new confirmed cases. At this point, there is no state in the union that can claim to have the disease under control. New infections shattered old records this week. The COVID Tracking Project reported 88,452 new cases on Wednesday, 97,080 new cases on Thursday, and 90,058 new cases on Friday. These are the highest daily totals ever recorded. Across the Atlantic, cases are rising in France, the U.K., Belgium, Italy, the Netherlands, Germany, Spain, Russia, Ukraine, Czechia, Romania, Poland and Switzerland. Lockdowns are being re-launched in several countries.
Initial weekly unemployment claims continued to fall last week. According to data collected by the Department of Labor, initial claims totaled 751,000 during the week ended October 24, down by 40,000 from the prior week’s upward-revised figure of 791,000. Initial weekly claims finally subsided below the one-million mark at the end of August, but they had been stuck stubbornly above 800,000 until just the past two weeks. Prior to the pandemic, initial claims were typically 200,000–220,000 each week. During the week of March 28, initial jobless claims skyrocketed to hit a peak of 6,867,000. From that peak, initial jobless claims fell for 15 weeks. July brought a setback, and claims rose again. During the week ended August 8, claims finally fell below one million, but they were not able to sustain the downward trend. During the 32 weeks since U.S. states began to issue shelter-in-place orders, over 66 million Americans have filed initial jobless claims. Some are at the point where benefits are running out.
Supply, demand and inventory data will be influenced this week by Hurricane Zeta, which made landfall Wednesday as a Category 2 storm in already-battered Louisiana. The fast-moving storm hit Mississippi, Alabama and Georgia also, before moving on to South Carolina and North Carolina. At the high point, over 2.6 million customers were without electrical power.
The U.S. Energy Information Administration (EIA) published official inventory data for the week ended October 23. The EIA reported an addition to crude oil inventories of 4.32 million barrels (mmbbls.) Gasoline inventories were drawn down by 0.892 mmbbls, and there was a larger drawdown of 4.491 mmbbls from diesel inventories. The EIA net result was a modest inventory drawdown of 1.063 mmbbls. The modest draw on gasoline inventories and the significant drawdown from distillate stockpiles boosted futures prices for these products midweek, but prices for the oil complex as a whole slid thereafter.
During the worst of the oversupply, the EIA reported that crude oil in storage at Cushing rose from 35,501 barrels during the week ended January 3, 2020, to 65,446 barrels during the week ended May 1, 2020, an increase of 29,124 barrels. Cushing stocks fell to 45,582 mmbbls during the week ended June 26. However, the downward trend was reversed in July through early August, sending Cushing stocks back up to 53,289 mmbbls during the week ended August 7. Cushing stocks have trended up in September and October. The current week ended October 23 showed Cushing crude stocks at 59,995 mmbbls.
During the week ended October 23, U.S. crude production bounced back to 11.1 mmbpd, up by 1.2 mmbpd from the prior week. Production in the coming week is expected to retreat somewhat because of Hurricane Zeta. According to the EIA, U.S. crude production averaged 13.025 mmbpd in February, the highest total ever. Production fell to 12.25 mmbpd in April, 11.52 mmbpd in May, and 10.9 mmbpd in June. Production in July rose to an average of 11.04 mmbpd. In August, however, production fell to an average of 10.475 mmbpd before rising to 10.575 mmbpd in September. October production to date is averaging 10.625 mmbpd.
