Nymex Overview: Crude and Gasoline Futures Bounce Back, Diesel Struggles -- OPIS
17 January 2024 - 6:24PM
Dow Jones News
Crude oil and gasoline futures were recovering from steep
morning declines near midday Wednesday, while distillate futures
remained weak on forecasts of warmer weather next week across much
of the U.S.
The West Texas Intermediate contract fell as low as $70.50/bbl
in morning trading before buyers stepped in, pushing prices back
toward $72/bbl. Brent crude futures have outperformed WTI over the
past several sessions, widening the spread between the two
benchmarks. The difference narrowed marginally in morning
trading.
Refined products remained down ahead of midday, but RBOB
futures, which were off by just over 4.5cts/gal earlier, recovered
some ground to trade 1.25cts to 1.5cts lower. The NYMEX February
RBOB was down by 0.38cts to $2.1087/gal at midday.
In U.S. spot markets, California CARBOB prices were up by 4.5cts
to 5cts, while discounts along the Gulf Coast have widened, despite
reports of flaring at some refineries. Discounts also widened a bit
in the Chicago market as traders focused on weaker motor demand
fuel demand caused by snow and frigid temperatures.
Diesel futures remained under pressure as above-normal
temperatures are forecast next week for much of the U.S. The coming
warm-up is also being reflected in natural gas futures that have
come under pressure on Wednesday.
The NYMEX February ULSD contract was off about 4.5cts to
$2.6148/gal just ahead of midday and was less than 1ct above the
morning low. Most of the downside is diesel is in the front-month
contract, narrowing the spread between the February and March
contracts, which at midday was showing just over 4cts of
backwardation.
Not only are intermonth spreads falling apart, but trade sources
this morning said the "HOGO read" (heating oil minus gas oil) has
slipped to inside of 15cts.
Spot distillate markets were largely following futures, down
4cts to 5cts.
While crude oil has rebounded from lows seen earlier Wednesday,
the NYMEX February WTI contract was still off about 70cts to
$71.70/bbl near midday.
March Brent was down $1.12 to $77.17/bbl. Although Brent is down
more than WTI, its morning trading range has been fairly
narrow.
More activity was shifting to the March contract with February
WTI options set to expire on Wednesday. The March WTI contract was
down 82cts to $71.70/bbl, erasing the light contango in WTI
futures.
This content was created by Oil Price Information Service, which
is operated by Dow Jones & Co. OPIS is run independently from
Dow Jones Newswires and The Wall Street Journal.
--Reporting by Denton Cinquegrana, dcinquegrana@opisnet.com;
Editing by Jeff Barber, jbarber@opisnet.com
(END) Dow Jones Newswires
January 17, 2024 13:09 ET (18:09 GMT)
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