• Supply
  • Social Media
VisitTAC - The Arnold Companies
Customer LOGIN
TACenergy
Customer
LOGIN

Panic Selling Grips Markets Worldwide

Wednesday, Mar 18 2020
Market Talk

WTI is taking its turn leading the energy markets lower this week, dropping another 15 percent since Monday’s close, and reaching a new 18 year low overnight as the panic selling continues to grip markets around the world.

On a percentage basis, this would be the worst month ever (down 45% so far in March) for WTI futures, which have been trading for nearly 40 years. On a $/barrel basis, this $20/barrel drop is still a long way away from the October 2008 record of a $33/barrel decline.

Gasoline futures were shrugging off the 8 percent drop in crude oil overnight , trading up three cents/gallon after the API reported a seven million barrel decline in U.S. gasoline inventories last week, but have succumbed to the bearish pressure and are now trading modestly lower. Diesel stocks also had a large draw of 3.6 million barrels in the industry estimate, while crude stocks had a small decline of 421,000 barrels. The EIA’s weekly report is due out at its normal time.

While they have a much shorter history than WTI, and a small fraction of the trading volume of their petroleum cousins, ethanol futures have also dropped to a record low this week at $0.94/gallon. Given that fuel ethanol is around 198 proof alcohol, perhaps the excess inventory may find a new life in the hot market for sanitizing products. No word yet on Twitter if that is actually a viable solution to the virus.

Many physical fuel markets around the country are seeing basis values drop this week as traders are hesitant to buy anything with so much uncertainty around demand. The drop in both calendar and basis spreads is beginning to drive up premiums for storage options around the world, whether they be in major pipeline systems, inland terminals, or the vessels at sea turning into floating storage.

Another notable phenomenon this week, it’s not just physical demand that is trending lower. Trading volumes in the major petroleum contracts have been dropping daily since the March 9 price plunge. This could be due to the extreme volatility forcing some trading programs to the sidelines to avoid being run-over. That lack of volume is a technical signal of low conviction which can be a sign that this trend is approaching its end. That said, low volume can also mean greater volatility since anyone needing to trade a large position will create bigger price movements than normal, so don’t expect these markets to calm down for a while.

Click here to download a PDF of today's TACenergy Market Talk.

News & ViewsMarket Talk

News & Views
Latest Posts

KTBS 3 Spotlight on TACenergy Leadership COO Fred Sloan - Sharing Thoughts on Changes in the Gas Market
Go Rentals Opens 10 New Locations with Partner, TAC Air
Tac Air's new facility features B17-G model airplane, Military Situation Room
TAC Air B-17G Model Brings Nostalgia and Tears

News & Views
Archive

Market Talk
Latest Posts

Market Talk
Archive

TACenergy logo
Sales:  800-375-FUELSupply & Logistics:  800-808-6500

Get in Touch

Sign up to receive market talk updates in your inbox each day.
Establish a credit account.
Apply For Credit
Need to make a fuel order today?

Follow us

TACenergy
  • Supply
  • News & Views
  • Market Talk Updates
  • Social Media
  • Contact a Representative
  • Customer Login
  • Apply For Credit
Find Your Next Great Role With TACenergy.
Explore Careers
  • Privacy Policy
  • Terms of Use
  • Employee Login
  • Sitemap
TACenergy, LLC © 2022. All Rights Reserved.