News

Crude Futures Drop, Gasoline Reaches Lowest Level

James L. Flint

• November 16, 2023

Crude futures experienced a significant decline by midday Thursday, marking the second consecutive daily drop. RBOB gasoline futures also slumped, reaching their lowest level of the year in 2023. This sudden downturn in the petroleum market occurred without any notable news headlines to explain the shift.

Late last week, there was a noticeable unwinding of gains that had been driven by optimism surrounding global fuel demand. As of 11:25 a.m. ET, NYMEX December West Texas Intermediate crude futures were down $3.20 per barrel to $73.50 per barrel. Similarly, January WTI experienced a drop of around $3.20 per barrel to $73.60 per barrel.

In London, January ICE Brent crude futures based in London saw a decrease of $3.20 per barrel to $78 per barrel, while February Brent fell by $3 per barrel to $78.05 per barrel.

Turning to refined product futures, the most-active January NYMEX RBOB registered a decrease of 8.30 cents to $2.0975 per gallon, and the front-month December RBOB dropped by 8.45 cents to $2.1170 per gallon. For January ULSD, the price was 9.35 cents lower at $2.6975 per gallon, and December ULSD slid 9.45 cents to $2.7745 per gallon.

Early Thursday, most East of the Rockies gasoline markets fell below the $2 per gallon level. The weakness in futures resulted in Gulf Coast CBOB reaching the lowest point of the year at $1.895 per gallon. Chicago prompt CBOB slipped below $2 per gallon to $1.99 per gallon, while the Group 3 market dropped to approximately $1.965 per gallon. Notably, Gulf Coast, Group 3, and Chicago gasoline all hit new lows for 2023.

Regarding the market outlook, a significant spread between cash gasoline prices in the Gulf Coast and New York is expected to maintain strong support in line space markets.