Profit taking following the previous session's rally led to mostly declines in the petroleum complex by midday Tuesday. Crude oil pared some losses, however, with March now trading as the front-month position for WTI futures.

On Monday, markets jumped on tensions in the Red Sea and news of a Ukrainian drone strike on a Russian Baltic oil port. However, prices have cooled somewhat as Libya has returned 300,000 barrels a day of production that was shut-in earlier this year.

March WTI futures reached a high of $75.25 but have since backed away from it. They were trading before midday near $74.50/bbl, off 26cts. March WTI futures had traded down as much as $1.35 in earlier trade.

March Brent has also pulled back from the earlier highs that have left the contract nominally lower. It last traded at $79.72/bbl, down 34cts.

Refined products were mixed as ULSD futures are inching higher and RBOB futures are giving back some of Monday's strong move to the highest levels of 2024.

February and March RBOB are off by about 3cts heading into midday, with the contracts trading at $2.2091 a gallon for February, down 2.87cts. March RBOB was at $2.2327/gal, down 2.83cts.

RBOB has been under pressure on expectations of low demand based on last week's storms and bitter cold. Early indications from OPIS demand data showed volumes during the most recent week are down by several percentage points.

The West Coast, specifically Southern California and San Diego, have been inundated with rain and flooding that are expected to have an impact on overall U.S. products demand. Both Los Angeles and San Francisco CARBOB differentials are down a few cents, leading to a price decline in the 5cts area by midday Tuesday.

Diesel futures are higher but they are starting to inch back toward unchanged as the rest of the market starts to see price gains shrink.

Heading into midday, February ULSD futures were up by just inside a penny at $2.7027/gal, with March last trading at $2.6758/gal, up 1.21cts. The spread between the two months continued to compress due to the February contract's expiration and relatively milder weather.

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 Frank

Tang, ftang@opisnet.com

(END) Dow Jones Newswires

January 23, 2024 13:03 ET (18:03 GMT)