Petroleum futures were modestly higher near midday Monday and may be primed for further gains on a strong seasonal tendency for first-quarter price increases.

The speculative skew is limited, particularly for West Texas Intermediate crude. Money managers have less than two long positions for every sale, down from the two-year average skew of 7-to-1 and a five-year average of 6.8-to-1.

Market-moving headlines were mixed. While the White House warned U.S. forces may be in for a long period of dealing with Houthi attacks, slumping demand in China and an increase in layoffs in the U.S. may be keeping some oil traders on the sidelines.

The NYMEX February WTI contract expires on Monday and it may not roll off quietly. The contract was up $1.68 to $75.09/bbl and the March contract was $1.50 higher at $74.75/bbl. The March Brent was up $1.39 at $79.95/bbl.

Forecasts of warmer weather this week across much of the U.S. were pressuring diesel futures, with prices seeing only modest gains. The NYMEX February ULSD contract was up 0.87ct to $2.6708/gal and U.S. cash markets were seeing gains of 0.75-2.5cts/gal.

Market sources are expecting the Energy Information Administration Wednesday will report a draw last week in U.S. distillate stocks and put demand at about 4 million b/d or higher.

Expectations for gasoline remain low. EIA may report refinery input last week fell by more than 1 million b/d and could estimate demand at less than 8 million b/d as cold and snow kept many drivers at home.

Still, the calendar is close enough to spring to spark some buying of the motor fuel. The NYMEX February RBOB contract was up 5.71cts to $2.2199/gal and cash prices were higher in all U.S. spot markets. East of the Rockies' markets saw gains of 5.75-6.5cts/gal while Western markets were up by 4.5-5.75cts/gal.

Midwest gasoline prices are well below those in the rest of the country as combined gasoline and distillate stocks in the region are about 20 million bbl above what is considered normal for this time of year.

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 Tom Kloza, tkloza@opisnet.com; Editing by Jeff Barber, jbarber@opisnet.com

(END) Dow Jones Newswires

January 22, 2024 12:42 ET (17:42 GMT)