The Price of West Texas Intermediate crude oil went through a crash. Though prices have mostly recovered now, this might mean lower prices at the pump. Oil went through a flash crash overnight
The chart shows the price for WTI crude overnight. When it dipped below $45 per barrel, it triggered a selling storm. Margin calls, stop loss, and probably some short selling as well. (Isn’t technology wonderful?)
Traders tell CNBC there were no major headlines pushing prices below key technical levels, though a disappointing report on U.S. crude stockpiles and news of higher output in Libya has weighed on market sentiment this week.
“Disappointing” in this context means that the supply is high, and so prices are low. For those of us who aren’t trading oil futures, low prices of crude, usually presage low prices at the gas pump. Not a bad thing.
The international bellwether, Brent Crude, also went through a flash crash, though it has rebounded a bit more. Brent controls the price of petrol in the UK and EU more than it influences what happens in the US, though it can have an impact on the price of gasoline.
I haven’t seen any news on the 3rd benchmark – Dubai crude. But then it might just not be on reporters’ radar.