NYMEX Overview: Robust Gains in Petroleum Futures May Test Trader Mindsets -- OPIS
January 11 2024 - 1:10PM
Dow Jones News
Petroleum futures are sharply higher by midday Thursday, and
technical charts suggest the next several hours of trading and the
settlement could determine whether the 2024 trading range evolves
into an uptrend.
On Thursday, expected cold weather in the U.S. and Middle East
tensions could increase prices further. Meteorologists now expect
wintry weather may gain a stranglehold on the eastern two-thirds of
the U.S. continent next week. Severe weather could crimp some
refineries and cold temperatures could push distillate molecules
into winter burns.
In addition, the market also closely watched Iran's seizure of
an oil tanker in the Gulf of Oman, which raises concerns about a
wider sphere of conflict and warfare in the Middle East.
Those factors were enough to provoke a rally of about $2/bbl for
crude, even though WTI and Brent have thus far failed to breach key
levels of $75/bbl for WTI and $80/bbl for Brent. Also, brisk oil
rallies in the morning have tended to fade ahead of settlement so
far in 2024.
At midday Thursday, February WTI was ahead $2.04/bbl at
$73.41/bbl. March Brent was up $1.94/bbl at $78.74/bbl.
Some brisk gains were also seen for gasoline and diesel. RBOB
futures are benefitting from the advent of some January maintenance
at some of the largest Gulf Coast refineries. Gasoline stocks are
expected to climb but the increases may not match the
10-million-bbl and 8-million-bbl gains of the last two weeks.
February RBOB moved up 6.15cts/gal to $2.1288/gal. Cash markets
were similarly higher with increases of 5.5-7cts/gal East of the
Rockies and smaller gains of 4.5-6cts/gal out West.
Diesel should be the biggest beneficiary of cold weather.
February ULSD futures were ahead 8.53cts/gal at $2.6859/gal. Right
now, the market is anticipating some mid-January demand levels
above 4 million b/d thanks to heating oil demand. Should there be
any natural gas interruptions in northern states, the market could
have more exponential gains.
The cold temperature has helped diminish the gap between areas
with access to tidal water and inland bulk markets. Midwestern
diesel had been available for 40-45cts/gal under futures but that
discount has been pared to 28-29cts/gal.
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 Frank
Tang, ftang@opisnet.com
(END) Dow Jones Newswires
January 11, 2024 12:55 ET (17:55 GMT)
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