Market Movements: Manic Monday Recap

The week kicked off with a "Manic Monday," as major indices tumbled in response to the Bank of Japan's surprise interest rate hike - only the second increase in 17 years. The move led traders who had borrowed yen at low rates to scramble, covering their short positions and setting the tone for the week.

Midweek, OPEC+ (comprising the 13 OPEC members and 10 allied oil-exporting countries) reported a significant increase in crude oil production—the largest in nearly a year. Simultaneously, U.S. crude oil production hit a record high of 13.4 million barrels per day. ExxonMobil began restarting units at its Joliet, Illinois refinery after a three-week outage caused by a storm-induced power failure. This helped ease previously volatile Midwest oil spreads.

Despite these shifts, the EIA reported that gasoline and diesel prices remained relatively stable, with national averages hovering around $3.45 per gallon for gasoline and $3.75 per gallon for diesel.

By week's end, recession fears had subsided slightly as markets found some stability. Equities rose by 2%, buoyed by a stronger-than-expected employment report. However, we remain vigilant; despite the surge in production, crude oil inventories fell for the seventh consecutive week, supporting prices and the likelihood of continued volatility.

Looking to safeguard your business from fuel price swings? Join us on August 20th at 2 PM EST for our webinar on Advanced Hedging Techniques. Sign up here today!