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WTI Crude Plunges To New 7-Month Lows

Tyler Durden's picture




 

Brent crude is rising this morning up from an earlier dip to $101.75. That is not the case for WTI crude which has been in freefall since this morning's CPI data print. Brent-WTI has soared from below $5 to over $6.50 in the last few hours as WTI drops to a $95 handle at its lowest since mid-January.

 

 

Obviously positioning in crude was very speculatively long but one wonders at the price action when it would appear to be the only 'weapon' Obama has left to fight Putin.

 

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Tue, 08/19/2014 - 12:51 | 5115014 Magnix
Magnix's picture

and its STILL $3.30 gas price!

Tue, 08/19/2014 - 13:00 | 5115066 TideFighter
TideFighter's picture

Did somebody start making 3-ton SUV's that get 75 mpg? 'Cause that's all I see around here, more and more SUV's big enough to say AMTRAK on the side. Where is the consumption dropping? Don't say Ferguson because dem looterz iz drivin Caddez to da sho. 

Tue, 08/19/2014 - 13:15 | 5115155 NOTaREALmerican
NOTaREALmerican's picture

You're not one of the eco-watermelons that wants to emasculate this country by forcing everybody to drive pansy euro-trash cars, are ya?

This country can only stand up to the likes of ISIS if we are manly enough to do so.  Why do you think those goddamn european pansies don't fight in the middle-east?  You ever ask yourself that?  It's because of those goddamn pansy cars they've got over there.  You figure it out.

Tue, 08/19/2014 - 13:21 | 5115190 Escrava Isaura
Escrava Isaura's picture

Just got gas at Costco.

Paid $71.73 for 21.8 gallons = $3.27 a gallon.

Just can't believe!

I thought it would have been $5 dollars and gold over $3 thousand.

Tue, 08/19/2014 - 14:26 | 5115529 Publicus
Publicus's picture

ISIS is selling oil for cheap.

Tue, 08/19/2014 - 15:24 | 5115915 Mike in GA
Mike in GA's picture

$3.07/gal Augusta, Ga

Tue, 08/19/2014 - 15:50 | 5116095 disabledvet
disabledvet's picture

WTI a lot easier to refine than Brent. Another "odd couple" (like gasoline being more expensive than diesel.)

At some point this will be great news for jobs growth and recovery...still a no show though.

Tue, 08/19/2014 - 16:29 | 5116305 Escrava Isaura
Escrava Isaura's picture

Disable,

It’s a NO show because we are past peak growth.

Why do you think we have accumulated debt since 1970 exponentially?

Answer: To hide this ugly truth.

 

Tue, 08/19/2014 - 16:32 | 5116338 KansasCrude
KansasCrude's picture

Hey DV do you not go back and read answers to your posts?  Must not as I pointed out to you that diesel is priced now based on the fact that it has about 20% MORE energy per gallon than gasoline.  For decades technology did not allow diesel to be used as easliy in car/pickups as gasoline.  That has changed and as a result the price has risen to reflect that.....  So a market inefficiency no longer exists that allows diesel to sell well below gasoline on an ENERGY ADJUSTED BASIS.  We import much more gasoline than diesel due to most countries using more Diesel than us in proportion to our total demand.  If you take the time to look at inventories on Diesel you will see we are typically in a much tighter supply demand balance than gasoline.  So please check the data if you please.  I really hate to see you look ignorant on this matter by continually making that remark.  Yes it sucks that the old discount or slight premium has disappeared but its really how markets are supposed to work.  As far as the war on oil prices its really not in our best interests to keep knocking down the oil price as there are lots of producers out there not making money in the $90's.  We will most likely pay for it in the longer run.  Just like most of the other crap the Gubmint and the Banksters are orchestrating....

Tue, 08/19/2014 - 19:25 | 5117372 Escrava Isaura
Escrava Isaura's picture

KansasCrude,

Awesome!

Tue, 08/19/2014 - 14:33 | 5115580 aVileRat
aVileRat's picture

The spread, google it. NO seriously, on a financial site we see this every time someone posts the oil chart. I would bet less than half the posters who may be financial pro's can not explain the price basis you pay at the pump, vs what it is produced at in the field. Bonus points for the 5 key drivers for pump prices at the wholesale level. Hint, it's not the Koch's sex life or Bar scene in Gaza.

 

Tue, 08/19/2014 - 14:37 | 5115581 aVileRat
aVileRat's picture

Edit: hey sweet, the mythic double post. Time to reset the firewall software.

 

 

Tue, 08/19/2014 - 12:54 | 5115031 Fred Hayek
Fred Hayek's picture

Gosh, it's almost like at least one of them is manipulated and not actually responding to supply and demand parameters of price discovery.

Tue, 08/19/2014 - 13:16 | 5115157 French Frog
French Frog's picture

I would go with: "one of them is manipulated twice as much as the other one"

 

Tue, 08/19/2014 - 14:20 | 5115495 firstdivision
Tue, 08/19/2014 - 12:55 | 5115033 Dr. Engali
Dr. Engali's picture

Damn with all these geopolitical "fears" ahem..... staged bullshit......... one would think oil and PMs would trade to the upside.

Tue, 08/19/2014 - 13:49 | 5115350 ekm1
ekm1's picture

No. Not if oil is used a collateral for derivatives

Tue, 08/19/2014 - 12:56 | 5115043 kito
kito's picture

how odd this is occurring now that the west is pursuing an agenda against russia..................

Tue, 08/19/2014 - 13:36 | 5115286 Winston Churchill
Winston Churchill's picture

Secret SPR sales ?

That would be totally stupid in this situation, so yes exactly what the clowns in DC would do.

Tue, 08/19/2014 - 13:40 | 5115305 kito
kito's picture

there is little doubt they are hammering down the price of oil in furtherance of our new "cold war"....how long will our saudi allies and others will accept it?

Tue, 08/19/2014 - 13:43 | 5115313 fonzannoon
fonzannoon's picture

maybe we are just in a deflationary environment where the dollar is strengthening and holders of all things  USD will continue to benefit from the contunued beautiful deleveraging? 

Tue, 08/19/2014 - 13:48 | 5115348 ekm1
ekm1's picture

Saudis have trillions of dollars as reserve which would be useless if USD collapsed

 

Saudis want strong USD and can extremely well live with oil at $70 maximum

Tue, 08/19/2014 - 13:52 | 5115362 fonzannoon
fonzannoon's picture

$70 max? Where do we sign? That puts gas at around what....$2.75 a gallon? What are we waiting for? 

Tue, 08/19/2014 - 13:54 | 5115371 ekm1
ekm1's picture

Collapse of derivatives, that's what the wait is about, which would make "few" bankers poor overnight, just like Madoff.

 

remember madoff?

Tue, 08/19/2014 - 13:58 | 5115387 kito
kito's picture

fonz perhaps the "deep state" is working to lift the dollar in forex and hammer down the price of oil in the markets simultaneously........

oh fonz, deflation?? have you been to the supermarket lately? paid college tuition? paid for health insurance? 

Tue, 08/19/2014 - 14:04 | 5115421 fonzannoon
fonzannoon's picture

Sure, the cost of goods are rising. Wages are not, so it's no big deal. Besides, as long as you save in spy there is no inflation. However if the system starts to falter and we are seeing signs right now that it is with the recent delivery failures that have been predicted, remember, if you don't hold it (treasury bond certificates) you don't own it.

Tue, 08/19/2014 - 14:31 | 5115560 kito
kito's picture

fonz, save!!!??? did you say save!!!??? fonz, what reality are you in!!! you need to leave the comfort bubble of the tri state area and check out whats going on in the rest of america. nobody is saving. most americans cannot go a few weeks without a paycheck to survive. come on fonz!!! save???!!!!!

Tue, 08/19/2014 - 14:34 | 5115588 fonzannoon
fonzannoon's picture

you are only talking about 95% of the people. i'm talking about the other 5%. 

 

Tue, 08/19/2014 - 12:58 | 5115053 passenger_pidgin
passenger_pidgin's picture

Why buy when you can skim from the Ohio River?

Tue, 08/19/2014 - 12:57 | 5115056 NOTaREALmerican
NOTaREALmerican's picture

Looks like the Trash Class will be able to buy food with all the money they'll be saving on gas.

Tue, 08/19/2014 - 12:59 | 5115064 FJ
FJ's picture

Now, this will hurt Russia???

Tue, 08/19/2014 - 13:11 | 5115119 NOTaREALmerican
NOTaREALmerican's picture

Will it affect "The Convoy"?

Tue, 08/19/2014 - 13:23 | 5115206 kowalli
kowalli's picture

nope

Tue, 08/19/2014 - 13:05 | 5115073 ekm1
ekm1's picture

Plunge?

Watch out for $10 drops per day.

 

Way, way, way overdue 

 

An inevitable oil price collapse will trigger derivative margin calls and bankrupt bank lobby which is holding hostage the real economy

Tue, 08/19/2014 - 13:14 | 5115142 Two Theives and...
Two Theives and a Liar's picture

Agreed..OIl price has been buoyed for some time by all the funny munny looking for a home. With global GDP where it is this should not be a surprise. Unfortunately this means more "Dinosaur-UVs" clogging up the local roads.

Tue, 08/19/2014 - 14:24 | 5115517 SheepDog-One
SheepDog-One's picture

I still believe what caused the banks all their trouble back in 2007 was they were all very short oil at around $40 and it shot up to $140 or so, so now the opposite is set up to happen.

Tue, 08/19/2014 - 13:13 | 5115132 cougar_w
cougar_w's picture

Tight oil plays become uneconomical under $85

Tue, 08/19/2014 - 13:19 | 5115175 Spastica Rex
Spastica Rex's picture

Sssshhhhhh!

Tue, 08/19/2014 - 13:23 | 5115202 cougar_w
cougar_w's picture

Wait. Did I say that out-loud?

Tue, 08/19/2014 - 13:24 | 5115201 ekm1
ekm1's picture

no

Governments will provide "rebates" to make them instantly economical as long as technology exists and harm to nature and water supplies is deemed acceptable

Tue, 08/19/2014 - 13:46 | 5115330 Spastica Rex
Spastica Rex's picture

Nationalize the tight "oil" "fields?"

Interesting idea!

Tue, 08/19/2014 - 13:53 | 5115366 ekm1
ekm1's picture

Oil industry is practically nationalized.

Anything to keep the energy flowing as long as harm on water supplies is tolerable, and of course if technology exists

Tue, 08/19/2014 - 14:11 | 5115459 Spastica Rex
Spastica Rex's picture

Adopting socialist practices to defend the blessed, non-negotiable Western birthright of ever expanding material profligacy makes me chuckle, but I don't disagree with your remarks at all.

On the other hand, the definition of "tolerable harm" will, in the end, be quite malleable, I think.

Tue, 08/19/2014 - 13:26 | 5115233 Escrava Isaura
Escrava Isaura's picture

Talking numbers (heard on the radio): Orange juice sales down 9% from 2013.

Is that right?

Can't believe in that much.

Tue, 08/19/2014 - 14:17 | 5115488 SheepDog-One
SheepDog-One's picture

Orange juice costs too much, people just going with straight vodka shots now.

Tue, 08/19/2014 - 14:33 | 5115578 Spastica Rex
Tue, 08/19/2014 - 13:28 | 5115245 TabakLover
TabakLover's picture

Putin ain't gonna like that.

Tue, 08/19/2014 - 13:29 | 5115254 ekm1
ekm1's picture

That's why he was in a rush to get China and brics to avoid use of USD

Tue, 08/19/2014 - 14:15 | 5115479 SheepDog-One
SheepDog-One's picture

Putin says 'Whatever'

Tue, 08/19/2014 - 13:42 | 5115311 jubber
jubber's picture

mysteriously both Chevron and Exxon are up...funny that

Tue, 08/19/2014 - 13:44 | 5115318 fonzannoon
Tue, 08/19/2014 - 13:42 | 5115314 orangegeek
orangegeek's picture

WTI has been in a downward trend for some time

 

http://bullandbearmash.com/chart/wti-oil-weekly-continues-bull-channel-d...

 

Weekly chart puts some perspective on this move - looks like we are heading below 90 very soon

Tue, 08/19/2014 - 14:00 | 5115397 quasimodo
quasimodo's picture

So, this means I can expect 2$ gas again?

 

Tue, 08/19/2014 - 13:59 | 5115389 GooseShtepping Moron
GooseShtepping Moron's picture

There are several factors contributing to the decline in oil, some of which (like the winding down of QE, demand destruction, and economic warfare directed at Putin) have been mentioned. However, what is not often mentioned is the Chinese credit contraction and the Chinese crackdown on hot-money commodity trading scams. The de-corruption of China was part of the de-dollarization plan that Russia and China put in motion several months ago. I predicted at that time that it would be a good opportunity to short commodities priced in USD (I would link to the post, but it seems to have scrolled off the "My Account" screen). But predictions aside, the upshot is that a pullback in commodities prices was a foreseeable result of the Sino-Russian de-dollarization plan, so I'm sure Putin has already factored it into his deliberations and is prepared for it.

Tue, 08/19/2014 - 16:13 | 5116239 Escrava Isaura
Escrava Isaura's picture

GooseShtepping Moron,

I found your post extremely insightful.

Then, you wrote: “Putin is prepared for it.”

Would you please elaborate on ‘Putin is prepared’ for us?

 

Tue, 08/19/2014 - 14:05 | 5115431 Wave-Tech
Wave-Tech's picture

At least one side of the Petro-Dollar equation is coming under assault...

Tue, 08/19/2014 - 14:13 | 5115467 SheepDog-One
SheepDog-One's picture

Since everyone likes to reference 'pre-Lehman' levels so much these days, what was a barrel of crude back then? Around $30 if I remember right.

Tue, 08/19/2014 - 14:18 | 5115491 FreeNewEnergy
FreeNewEnergy's picture

I don't know who to thank for lower gas prices, but THANK YOU and KEEP GOING. Figure if gas was 25% cheaper ($2.70 instead of $3.60), that's a lot more money in the hands of consumers, buying stuff other than FUKKING GAS!

This is long overdue, as demand has been falling since 2001. Come on, you think that with all the new cars being sold, many of them getting 30+ MPG, plus hybrids, plus all the wind and solar being put to use, plus conservation (not enough of that, IMO) and all the fracking and finds of Nat Gas and oil domestically, that the price would be much lower already?

Been waiting on this a long time because of all the markets that are manipulated, oil has to be near the top of the list and the price of gas at the pump has been sucking the economy dry for a long time. Want to see a rebound in consumer spending, drop the price of gas below $2.00 and watch what happens. Boom! Not rocket science, folks.

And, if, as some commentators above have alluded to, the price of oil is tied to some derivative plays which might take down some banking interests, BRING IT ON, BITCHES!

BTW: I think all the shit in Ferguson is primarily due to a lot of stupid niggas with nothing but time on their hands. Was watching some f the stuff last night, around 7:30 EDT, and all I saw were a lot of dumbasses with nothing better to do than walk around looking like they were actually doing something. To me, it's just entertainment, though I prefer baseball or other sports. People don't get all uptight about it.

Tue, 08/19/2014 - 16:57 | 5116453 quasimodo
quasimodo's picture

Big oil will not make a profit with $2 gas

 

/sarc

Tue, 08/19/2014 - 14:20 | 5115496 Infinite QE
Infinite QE's picture

Programming the donkeys to think, "Look Martha, attacking Ukraine and Russia is actually good for the economy and we can buy an even bigger super-SUV now"

Tue, 08/19/2014 - 14:32 | 5115502 firstdivision
firstdivision's picture

Gee, its almost as if someone is trying to boost retail sales by lowering fuel costs....who would have a hand strong enough to do that...hmmmm

Tue, 08/19/2014 - 16:09 | 5116208 huggy_in_london
huggy_in_london's picture

It just proves that these cunts have been manipulating the price of oil against us all to squeeze us all... when they need it lower to pressure russia... whoosh, mysteriously it falls.  When's this revolution starting?

Tue, 08/19/2014 - 17:12 | 5116529 ToNYC
ToNYC's picture

Putin flushed, and Brent tumbled.

 

Tue, 08/19/2014 - 17:46 | 5116763 RadioactiveRant
RadioactiveRant's picture

 

Don't most Middle Eastern ragheads need ~$100 a barrel to prop up their despot régimes? Things really could get interesting in that part of the world if the "princes"/sheiks have to cut free-shit.

Wed, 08/20/2014 - 01:41 | 5118692 bid the soldier...
bid the soldiers shoot's picture

Hey, this doesn't have anything to do with too much supply and not enough demand?

Deflation caused by the Emperor's New Recovery?

I'll stay tuned to ZH, then I'll be one of the first to know.

Wed, 08/20/2014 - 13:32 | 5120845 Magooo
Magooo's picture

Demand is cratering because global growth is slowing.

 

The real danger is that oil drops TOO much because that means that big oil goes bust.  Fracking needs 95 bucks to make money so they are on a knife edge.

 

Even when oil was 110 Exxon was cutting capex because the price was not high enough to justify new exploration

 

See

 

OIL BECOMING TOO EXPENSIVE TO EXTRACT

It emerged this week that the drilling of wells in the North Sea has crashed by around 50% this year, compared to the year-ago period.

 

The reason for this is simple: the cost of extracting oil in North Sea has quintupled over the last decade, discouraging companies from investing within the region.  http://www.fool.co.uk/investing/2014/07/18/surging-north-sea-project-costs-are-putting-the-regions-future-at-risk-tullow-oil-plc-premier-oil-plc-xcite-energy-limited/

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