During the financial crisis of 2008-2009, WTI set the benchmark at $33.87/bbl of oil. We are lingering dangerously close to that level as we have witnessed U.S. WTI tick to a multi-year low of $34.53 in early morning trading. HO and RBOB follow suit and can be seen trading down $.0284 and down $.0439 respectively, continuing the downhill trend from last week. Both WTI and Brent have fallen every day since Dec. 4th when OPEC abandoned its output ceiling.
- Investors are anxiously awaiting the Fed’s decision regarding interest rates later this week.
- Baker Hughes data released Friday showed another decline in the number of U.S. oil rigs last week.
- Abnormally high temperatures hurt not only winter jacket sales, but also weaken diesel demand…significantly.
- Iran has already secured crude customers in anticipation of its sanctions being lifted by the first week of January.
- Front month January HO on the NYMEX has traded below the price of RBOB for the majority of the month.
- According to Bloomberg, while WTI trades around $35/bbl, a mix of Mexican crudes is down around $28/bbl, Iraqi around $25/bbl and western Canadian producers are even selling for less than $22 a barrel.
- Canadian oil producers are at the pivotal point where it may become difficult to cover their operational costs.