Gasoline and diesel fuel prices are expected to continue trending lower in the coming days as bearish attitudes hit crude oil markets. The price of oil tumbled Wednesday for the sixth consecutive day as the U.S. government reported crude supplies are the highest in 22 years.
Declining gasoline prices are a direct result of the weaker crude oil market, and will help ease the pinch on American consumers as seasonal demand for beef and other grilling meats increase.
Benchmark U.S. crude fell 81 cents per barrel to $96.20 in New York, and Brent crude dropped 47 cents per barrel to $112.26 on London markets. The six-day drop is the longest for U.S. oil since July of last year, and the longest for Brent crude since June 2010.
Wednesday was also a down day for U.S. stocks. The Dow Jones industrial average dropped 97 points to close at 12,835. Investors were said to be worried about the European economy and its effect on global markets.
Cattle futures closed higher on Wednesday, with June Live cattle at $116.60, up $0.82.
Trading of cash fed cattle was at a standstill through Wednesday, with packers bidding $117 per hundredweight, and feedyards holding out for $122 to $123. Showlists are called larger this week as feeders are pulling cattle forward ahead of the June contract that’s priced several dollars lower than the latest cash transactions.
The most positive market news for cattlemen remains strength in boxed beef markets and declining oil prices. Choice boxed beef traded Wednesday at $191.13, up $0.84 from Friday’s close. Wednesday’s Choice/Select spread was $5.08 per hundredweight.
Declining oil, gasoline and diesel prices suggest consumers will have additional spending power for food items such as beef. That’s good news for producers as the summer grilling season gets underway.
National average gasoline prices released Monday show consumers paying $3.79 per gallon for gasoline, down 4 cents per gallon from the previous week and 17 cents per gallon lower than last year.
National average diesel prices were quoted on Monday at $4.05, down a penny from the previous week and down 4 cents per gallon from last year.
On Tuesday the government cuts its forecast for average gasoline prices to $3.79 for the summer driving season, down from an initial estimate of $3.95 and below 2008’s record average of $3.80.
Retail gasoline prices reached a peak of $3.93 on April 5, but have fallen 17 cents per gallon since then as crude oil has dropped about $9 per barrel.