Oil Down Nearly 5% in Single Session; Lowest Since July
Reversing course back into negative territory on Thursday, NYMEX crude recorded its steepest one-day percentage loss since July 2009. At the close of today's session, the price of light, sweet crude oil for March delivery shed nearly $4 to settle back down from more than $77 to $73.14 a barrel.
Completing the oil complex's downward spiral, heating oil and gasoline futures also posted a negative movement Thursday, with the latter closing just below the $2-threshold after rallying yesterday on an unexpected products draw.
Today, concerns over Europe's fiscal health sent U.S. equities reeling, but also accelerated gains for both the U.S. greenback and Japanese yen against the euro. Moreover, a disappointing jobless claims report on the domestic front also put a damper on Wall Street and closed wallets in the commodities market.
Petroleum Pushed to the Back Burner
U.S. crude oil futures have continued to slip from the start of this year's bullish $75-$80 trading range, the two main drivers of which have been lack of fundamental supply-and-demand support and the dollar's revived safe haven demand as economic pressures have spurred traders away from riskier markets.
With refinery utilization at its poorest level since the last decade, energy prices have fought to maintain bullish momentum -- and have, so far, forged ahead despite a lack of technical support.
According to the EIA, 2007 was the "peak" year for U.S. gasoline demand, with the largest energy consumer burning through more fossil fuel than any other region in the world. Since then, greater measures have been taken to reduce emissions and add more fuel efficiency to newer vehicles.
Rex W. Tillerson, head of the world's largest publicly traded international oil and gas company, recently underscored the still-tepid demand for petroleum products: "Motor vehicle gasoline demand is down, is headed down and is going to continue to head down."
As the U.S. has begun to shift its focus increasingly away from petroleum and onto renewable energy and cleaner-burning natural gas resources, energy futures will more than likely be underpinned by outside financial markets and other macroeconomic factors affecting the ebb and flow of trade.
Near term, the price per barrel of crude oil will stay afloat in its current range above $70 dependent on signals of a recovering economy.