Crude Oil Takes Largest 3-Day Dip Since 1998

In trading today, NYMEX crude futures fell another $2.86 to settle at $77.11, adding to the tally of large declines racked up since Tuesday.

Over the course of the last three days of trading, NYMEX crude futures have shed more than $9, amounting to a 10.5% decline in just 3 days. That represents the largest 3-day percentage change in NYMEX crude future prices since June 1998 when oil prices reached $13.48 after sliding $1.59 (10.6%). That 10.5% decrease is one of the 100 largest drops in crude prices during any 3 day period since the future's inception in 1984.

In terms of real dollars, the $9.08 that the NYMEX crude futures have shed over the last 3 days is among the 20 largest 3-day drops in NYMEX crude history, placing 17th on the all time list of declines. It falls right behind a $9.24 (6.4%) decline to $136.05 during the 3 days from July 6th thtough 9th 2008.

In short, the last 3 days represent a very remarkable downward trend in crude prices, albeit still small compared with the not-so-distant memories of late 2008 and early 2009.

Whether the market will stabilize soon seems to depend largely on the situation in Europe where concerns about Greek debts are still causing repurcusions throughout the world's financial markets. As a result of the uncertainty and lack of definitive action by the European Central Bank, the Euro reached a 14-month low against the US dollar, which helps to push down commodity prices traded in dollars.

In the natural gas market, NYMEX Henry Hub futures settled down just over $0.06 to $3.93/mcf as natural gas storage levels increased more than expected. US natural gas storage is currently 19% above the 5-year average for this time of year, according to data from the Energy Department.