Oil prices are spiraling down, descending below $38 a barrel and dipping below $37 a barrel. This morning, the U.S. received the news that President Trump and First Lady Melania Trump tested positive for the COVID-19 virus. Stock markets and the U.S. dollar also are opening lower. WTI crude oil futures prices already had been falling, with rising supplies flowing against weak demand. Libyan output has been restored more quickly than anticipated. Iranian output also has risen. The news about the Trumps is accelerating the decline in oil prices. The oil complex is heading for a finish in the red this week.

President Trump and First Lady Melania Trump announced that they tested positive for COVID-19, just hours after White House aide Hope Hicks tested positive. They announced that they feel well, and that they will self-isolate in the White House. The impact on President Trump’s re-election bid is not clear, since he has trailed challenger former-Vice President Joe Biden in polls. Regardless of the election, it is always a serious matter when a country’s leader falls ill. It also heightens worries about the pandemic, since it brings home the idea that no one is fully safe from catching a virus. This development is driving markets down today. Oil prices have been dipping below $37 a barrel in early trading this morning. WTI prices currently are fighting to maintain the $37 a barrel level.

COVID-19 deaths have passed the one-million mark. The Johns Hopkins Coronavirus Resource Center reports that global cases of COVID-19 have now passed the 34 million mark, reaching 34,332,476, with 1,023,708 deaths. Confirmed cases in the U.S. passed 7 million, having risen to 7,279,065. U.S. deaths attributed to the disease have reached 207,816.

The Bureau of Labor Statistics released the September Employment Situation Report, also known as the Jobs Report. The country continued to achieve job recovery, with total non-farm payroll employment rising by 661,000 in September. The unemployment rate declined to 7.9%. According to the BLS, “In September, notable job gains occurred in leisure and hospitality, in retail trade, in health care and social assistance, and in professional and business services. Employment in government declined over the month, mainly in state and local government education.”

Initial weekly unemployment claims fell by 36,000 during the week ended September 26, coming in at 837,000 versus the prior week’s upward-revised figure of 873,000. Initial weekly claims have been below the one-million mark for five consecutive weeks. According to data collected by the Department of Labor, during the week of March 28, initial jobless claims 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 28 weeks since U.S. states began to issue shelter-in-place orders, approximately 62.8 million Americans have filed initial jobless claims.

A new round of corporate layoffs signals continued trouble, with companies including Disney, Allstate Insurance, United Airlines, American Airlines, and Shell Oil announcing layoffs. Shell is coping with the COVID-19 pandemic and paving the way toward its goal of being net zero emissions by the year 2050.

Wildfires in the western U.S. have now burnt 11,000 square miles, or over 7 million acres. This is larger than the entire state of Massachusetts, which is 10,565 square miles in size. It is the worst fire season in history already, and some fires are expected to burn until winter. One of the most recent blazes, called the Glass Fire, ignited on Sunday in California’s wine country, Napa and Sonoma counties, and it is only 5% contained. Air quality on the West Coast has been the worst in the world.

WTI crude futures prices opened at $40.15 a barrel today, a loss of $0.82 a barrel (2%) from last Friday’s open of $40.97 a barrel. The revelation that President Trump and the First Lady tested positive for COVID-19 is rattling the market, and oil prices are sinking. Prices already had backtracked recent gains from hurricanes and disasters, plus OPEC+ intervention. Weak demand, rising coronavirus cases, and the collapse of the stock market dragged oil prices down. WTI futures prices have retreated below $37 a barrel currently. Prices are heading for a finish in the red. Our weekly price review covers hourly forward prices from Friday, September 25 through Friday, October 2. 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 $1.1465 a gallon today on the NYMEX, compared with $1.1933 a gallon last Friday. This was a drop of 4.68 cents (3.9%). Oil prices are descending today on news that President Trump and the First Lady tested positive for COVID-19. March brought a crippling collapse of nearly 87 cents per gallon, but prices gradually crept back up in April and May. U.S. average retail prices for gasoline edged up by 0.1 cent to average $2.169/gallon during the week ended September 28. Retail prices reclaimed the territory above $2 per gallon during the first week of June. Gasoline futures are trading in the range of $1.0958/gallon to $1.151/gallon. The week is heading for a finish in the red. The latest price is $1.1140/gallon.

 

Source: Prices as reported by DTN Instant Market

Diesel Prices

Diesel opened on the NYMEX today at $1.1183/gallon, up slightly by 0.63 cents, or 0.6%, from last Friday’s open of $1.112/gallon. U.S. average retail prices for diesel fell by one cent per gallon during the week ended September 28 to average $2.394/gallon. Diesel prices generally have weakened this year, missing some of the price recovery seen in crude and gasoline markets. The week may finish in the black. Currently, diesel is trading in the range of $1.0688-$1.1235/gallon. The latest price is $1.0814/gallon.

 

 

 

Source: Prices as reported by DTN Instant Market

WTI Crude Prices

WTI crude forward prices opened on the NYMEX today at $38.60 a barrel, compared with $40.15 a barrel last Friday. This was a decline of $1.55 a barrel (3.9%.) Prices already were weak based on a worsening supply-demand imbalance, but this morning’s news about President Trump and the First Lady testing positive for COVID-19 is causing markets to fall even further. Coronavirus cases continue to rise, with over 7 million cases in the U.S. and over 207,000 deaths. Prices are now under $37.50 a barrel. The week is headed for a finish in the red. WTI crude is trading in the $36.63–$38.65 a barrel range currently. The latest price is $37.22 a barrel.

 

PRICE MOVERS THIS WEEK: BRIEFING

Oil prices are spiraling down, descending below $38 a barrel and dipping below $37 a barrel. This morning, the U.S. received the news that President Trump and First Lady Melania Trump tested positive for the COVID-19 virus. Stock markets and the U.S. dollar also are opening lower. WTI crude oil futures prices already had been falling, with rising supplies flowing against weak demand. Libyan output has been restored more quickly than anticipated. Iranian output also has risen. The news about the Trumps is accelerating the decline in oil prices. The oil complex is heading for a finish in the red this week.

President Trump and First Lady Melania Trump announced that they tested positive for COVID-19, just hours after White House aide Hope Hicks tested positive. They announced that they feel well, and that they will self-isolate in the White House. The impact on President Trump’s re-election bid is not clear, since he has trailed challenger former-Vice President Joe Biden in polls. Regardless of the election, it is always a serious matter when a country’s leader falls ill. It also heightens worries about the pandemic, since it brings home the idea that no one is fully safe from catching a virus. This development is driving markets down today. WTI crude oil prices have been dipping below $37 a barrel in early trading this morning, and prices currently are fighting to maintain the $37 a barrel threshold.

COVID-19 deaths have passed the one-million mark. The Johns Hopkins Coronavirus Resource Center reports that global cases of COVID-19 have now passed the 34 million mark, reaching 34,332,476, with 1,023,708 deaths. Confirmed cases in the U.S. passed 7 million, having risen to 7,279,065. U.S. deaths attributed to the disease have reached 207,816.

The Bureau of Labor Statistics released the September Employment Situation Report, also known as the Jobs Report. The country continued to achieve job recovery, with total non-farm payroll employment rising by 661,000 in September. The unemployment rate declined to 7.9%. According to the BLS, “In September, notable job gains occurred in leisure and hospitality, in retail trade, in health care and social assistance, and in professional and business services. Employment in government declined over the month, mainly in state and local government education.”

Initial weekly unemployment claims fell by 36,000 during the week ended September 26, coming in at 837,000 versus the prior week’s upward-revised figure of 873,000. Initial weekly claims have been below the one-million mark for five consecutive weeks. According to data collected by the Department of Labor, during the week of March 28, initial jobless claims 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 28 weeks since U.S. states began to issue shelter-in-place orders, approximately 62.8 million Americans have filed initial jobless claims.

A new round of corporate layoffs signals continued trouble, with companies including Disney, Allstate Insurance, United Airlines, American Airlines, and Shell Oil announcing layoffs. Shell is coping with the COVID-19 pandemic and paving the way toward its goal of being net zero emissions by the year 2050.

Wildfires in the western U.S. have now burnt 11,000 square miles, or over 7 million acres. This is larger than the entire state of Massachusetts, which is 10,565 square miles in size. It is the worst fire season in history already, and some fires are expected to burn until winter. One of the most recent blazes, called the Glass Fire, ignited on Sunday in California’s wine country, Napa and Sonoma counties, and it is only 5% contained. Air quality on the West Coast has been the worst in the world.

The U.S. Energy Information Administration (EIA) published official inventory data for the week ended September 25. The EIA reported reductions in inventories of 1.980 million barrels (mmbbls) from crude oil inventories and 3.184 mmbbls from diesel inventories. Gasoline inventories rose by 0.683 mmbbls. The EIA net result was an inventory drawdown of 4.481 mmbbls.

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. The current week ended September 18 showed Cushing stocks at 56,066 mmbbls.

During the week ended September 25, U.S. crude production remained flat 10.7 mmbpd. Approximately 0.5 mmbpd of production had been shut down to prepare for Hurricane Sally last month, but most production was quickly restored. 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. Production during the first four weeks of September has averaged 10.575 mmbpd.