Nothing to do with the American super big shopping day after Thanksgiving, but several items, some of which may reverse themselves. As it is, it was a pretty big drop, nearly 5 percent for the day for both West Texas and Brent crude, with the latter now just above $60 per barrel.
The big headline is the resignation of Iraqi prime minister Adil Abdul Mahdi. The immediate trigger of that was that it was demanded by Iraq’s most influential cleric, Ali Sistani. This came after weeks of mounting protests in Iraq against the government, both in Baghdad, but also among Shia in the South, with Sistani a Shia cleric. He is based in Najaf, the Shia holy city where Imam Ali is buried, the son-in-law of the Prrophet Muhammed. Protestors had just torched an Iranian consulate there. The supposed reason this might justify a fall in oil prices is that it is thought that the protests have reduced exports from Iraq, which is currently the second largest oil exporter in OPEC. I do not know if that will result, but if indeed this leads to Iraqi oil exports rising, then indeed a price drop is justified.
Perhaps the number 1 reason why oil prices plunged on Black Friday – the US is now a net exporter of crude oil and petroleum products for the first time in 70 years.
That has been gradually building up for a long time and actually happened about a month or so ago. Does not explain this sudden one day drop.
natural gas was down a bunch too…fell 22 cents to $2.28 / mmBTU on Friday, & was down 16% for the week…& btw, that $2.28 is an all time low for January gas; here’s a graph:
to be clear, that’s for January natural gas; summer contract prices have been cheaper…record production and less severe cold are the reasons given…