Jeff Mock
Active member
A broad commodities selloff hit the markets on Thursday, with oil and gold both declining notably.
Oil plummeted to a 14-month low under the $70 level on Thursday after the government reported a bigger-than-expected jump in crude inventories.
The benchmark oil contract was recently trading lower by $5.93 at $68.61 a barrel . Oil is now trading more than 50% off its midsummer high.
The Energy Information Administration said crude stocks jumped by 5.6 million barrels last week, which comes in well above the 3.1 million barrel increase analysts expected.
“The crude stock increase was a big surprise,” said Ritterbusch & Associates president Jim Ritterbusch. “It was enough to tilt the scales lower.”
Gasoline stocks also soared, rising by seven million barrels last week, more than double the increase analysts had expected.
“The increase in gasoline stocks … was an even bigger surprise,” Ritterbusch said.
Wholesale gasoline futures plummeted about 16-cents to $1.63 per gallon as a result. The rapid reduction in gasoline prices on the wholesale level are slowly chipping away at retail gasoline prices.
Regular retail gasoline hit $3.084 per gallon on average nationwide, according to the AAA's Daily Fuel Gauge Report. This is about 25% below its July 17 high of $4.11 per gallon. The $3.00 mark holds a certain level of psychological significance for drivers buying retail gas, according to analysts.
In other energy markets, heating oil ticked lower by 10 cents to $2.09 while natural gas traded higher by eight cents to $6.68.
