A trader looks up at a screen as the New York Stock Exchange opens on Monday. Oil traders are "blind" due to lack of government data, thanks to the government shutdown. (Image Source: Reuters)
Recently, we reported that gas prices have been hitting recent lows at least partly due to the federal government's shutdown. It was likely that these prices would continue to drop as long as the shutdown lasted, due to a lack of demand. However, the shutdown has affected another part of gas prices: Information the government publishes for stockbrokers to help determine oil supply and demand. Now, the price of oil is dropping due to this lack of information from the shutdown, and that will likely lower gas prices even further.
The commodities market often relies on commodity reports from the U.S. Commodity Futures Trading Commission, which helps indicate supply, demand, and other indicators in a specific commodity's market. Those were expected to be published today, but due to the government shutdown, they were not published, and may not be published at all this month. Consequently, oil traders are unable to determine the actual cost of oil in future contracts, rendering them "almost blind," according to one analyst.
At the moment, the lack of data has not brought down the cost of oil locally. While the November Brent contract on London's IntercontinentalExchange (ICE) was down 13 cents, the same contract on the New York Mercantile Exchange (Nymex) was up 36 cents. Furthermore, the November contract for gasoline on the Nymex was up 36 hundredths of a cent, to $2.6716 per gallon. Still, the potential for the lack of trade information lowering prices even more is a distinct and real possibility. Whether this will keep prices lower at the pump for an extended period of time remains to be seen, but the possibility certainly helps drivers, and might make it a distinct reality, and that has got to be one silver lining out of all of this mess.