Oil traders fastened their seat belts Tuesday morning as President Biden announced the release of 50 million barrels of crude from the U.S. strategic stockpile. Japan, China, South Korea, India and Great Britain added sales as well in an unsuccessful attempt to hold fuel prices down. Friday morning’s announcement by the World Health Organization of a new, highly mutative COVID variant tanked oil prices much more dramatically.
Traders feared lockdowns would kill demand for transportation just as supplies increased — a perfect storm for prices. By midday Friday, West Texas Intermediate crude for January delivery traded at $68.50 per barrel, down $9 on the week, while gasoline dropped 30 cents per gallon. January unleaded gasoline was worth $1.9850 before taxes per gallon, down from the previous Friday.
Stock Indexes Make U-Turn
S&P stock index futures soared to an all-time high on Monday but made a classic reversal closing lower. Friday’s COVID news added fuel to the fire as conservative investors joined short-term speculators on the fire escape. Friday’s S&P was down 100 points on the week, while Dow futures lost over 1,000 points.
Grains Take Back Seat
Although their decline was muted compared to financial futures, wheat and beans had a bad week as well, dropping sharply Friday morning. March wheat was $8.40 per bushel.
Words of Wisdom
“Perhaps the most important rule is to hold on to your winners and cut your losers. Both are equally important. If you don't stay with your winners, you are not going to be able to pay for the losers.” — Michael Marcus in Jack Schwager's “Market Wizards.”