Petroleum Markets Surge as OPEC Meeting Nears

At the start of the week, the petroleum futures market experienced a significant uptick in anticipation of the upcoming OPEC meeting. Industry participants are abuzz with conversations about potential actions to reduce crude supply further, countering the $15 per barrel decline seen since the peaks of September.

Surging Crude Benchmarks

Key crude benchmarks demonstrated strong performances, with January Brent futures climbing $2.16, reaching $82.77 per barrel, and December West Texas Intermediate (WTI) futures up $1.93, closing at $77.82 per barrel. These gains are among the most notable since the outbreak of conflict between Hamas and Israel.

Historical Context and Support Factors

Experts in market history note that the early autumn period often sees an average 27% drop in benchmark crude prices, but it usually sets the stage for subsequent rallies that could potentially spike prices by 44%. The reboot of major global refineries and the anticipated colder weather in late November to early December could provide additional momentum to the bullish trend.

Diesel and Gasoline Futures in Focus

This morning's diesel futures also shone, with December ULSD contracts rising 8.21 cents to $2.8546/gallon. Some gains in the range of 6.75 to 8 cents were also seen in contracts for 2024. Gasoline futures rebounded robustly as well, with December RBOB jumping 7.09 cents to $2.2554/gallon. Spot market prices saw increases between 4 to 9 cents across major markets.

Retail Gasoline and Consumer Response

Despite the uptick in wholesale markets, retail gasoline prices are on the downturn. The national average for regular unleaded is projected to fall below $3.30 per gallon within a day, with significant decreases in the Western states. However, these lower prices have not yet spurred an increase in demand, with consumption trailing behind the rates seen in 2022.

Petroleum, Futures, OPEC