Crude oil prices tumbled this week to the lowest price since early July, trading under $85 per barrel on Wednesday. Over the course of a week, prices collapsed more than $7.50 (-8.1%) amidst rising supplies. US crude oil inventories are currently near 375 million barrels nationwide, around 12% higher than the average supply for this time of year, and a record supply for this week since the Department of Energy began keeping records of weekly supply data in 1982.
Despite the high crude oil supply levels, gasoline and diesel fuel stockpiles are well below average. This has resulted partially from supply inefficiencies that have trapped a large volume of the crude oil in the Upper Midwest with few refineries nearby to process the crude into gasoline and diesel fuel. At the same time, other regions of the country, like California and New England, are dependent on importing foreign oil to feed their refineries, which has contributed to sharply higher prices in those areas.
Global oil prices remain higher the US prices due to ongoing supply threats, especially in the Middle East. As of midday Friday, US crude oil for delivery during December was worth $86, while Brent crude, a major European benchmark, commanded a 26% premium at $109 per barrel.
Sugar Prices Sour
Sugar prices fell to the lowest price in nearly two years, dropping to 19.28 cents per pound on Friday morning. Prices are under pressure due to a rapid Brazilian sugar cane harvest. Brazil is the world's largest sugar producer and controls almost 40% of the world's sugar exports.
In addition to being a household staple, sugar is a major feedstock for ethanol production. Although nearly 14 billion gallons of corn-based ethanol is produced in the United States each year, Brazil produces over 5 billion gallons using sugarcane. As a result, Midwest farmers and drivers can watch the price of sugar to gain greater perspective on the corn and gasoline markets. As of midday Friday, sugar for March delivery was worth 19.3 cents per pound.