Yesterday the thinking machines and their programs continued crude's fall from Wednesday's highs. The programs for buying and selling set resistance and support levels and automatically buy or sell based on prices piercing the preset levels. The support levels were pierced Thursday and Friday. Crude has been this low only twice since October 9.
The rise of the dollar and the economic problems of Spain, Greece, Portugal and Italy are causing the markets to rethink the direction of the world economy. There's very little talk about the demand for gasoline, the dropping rate of refinery utilization, and the large supply of crude. Brent, Europe's benchmark crude,has fallen even more dramatically and ended trading yesterday at $69.34 as the region's economic crisis continues to reveal more problems.
The high level of unemployment is a symptom of the lowered levels of economic activity and even the reduced rate of 9.7% is high. In the back of people's minds is whether this number will be revised upward at a later date.
This past week the news is not the fall from Friday to Friday but the volatility with prices being driven up and then falling even further down. The closing price yesterday was only -$1.79 at $71.16 but really -$9 from the week's highs. Gasoline was -2.62 cents at $1.882 but -16 cents from the week's highs. The stunner is the parallel descent of distillate. The heart of heating oil demand is the Northeast and just as a major snowstorm is set to drop one to two feet of snow distillate prices also tumbled -3.4 cents for the week at $1.871 but 15.8 cents from the high.
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