NYH, Gulf Spot Oil Products Notch Big Gains with Futures
CRANBURY, N.J. (DTN) -- New York Harbor and Gulf Coast spot oil products
mostly ended Tuesday's session with hefty gains on a rallying futures complex,
with benchmark New York Mercantile Exchange ULSD futures settling more than
5.0cts higher and RBOB futures gaining nearly 4.0cts at settlement.
After a slow start to the day's trading, business for prompt physical supply
turned brisk in the afternoon.
Cash differentials were flat to softer in the Harbor with the exception of a
five-point boost in the RBOB basis. In contrast, Gulf Coast oil products cash
differentials primarily strengthened with the forward roll to September futures
indexing with cycle 43 pipeline movement on the Colonial system.
Monday's news that Saudi Arabia would reduce crude exports in August
continued to lend upside price support for NYMEX oil futures, while
expectations for across the board draws from U.S. inventory to be reported for
week prior maintained the upside momentum through the close.
NYMEX August ULSD futures settled up 5.16cts at $1.5685 gallon, with
September delivery ending 5.09cts higher at $1.5730 gallon. NYMEX August RBOB
futures settled 3.94cts higher at $1.5692 gallon and the September contract
gained 3.84cts with a $1.5720 gallon settlement. NYMEX September West Texas
Intermediate settled at a six-week spot high of $47.89 bbl, up $1.55, with the
Brent contract on the IntercontinentalExchange settling over $50 bbl on the
spot continuous chart for the first time since early June, ending up $1.60 at
After settlement, NYMEX oil futures rallied on data from the American
Petroleum Institute, with September WTI futures trading at a better-than
six-week spot intraday high of $48.66 bbl and August ULSD futures spiking to a
two-month high on the spot continuous chart of $1.58 gallon.
The trade organization reported a much-larger-than-expected 10.2 million bbl
draw in domestic commercial crude inventory for the week-ended July 21 that
outpaced expectations for a 2.7 million bbl decline. Market expectations missed
the mark on API's finding for oil products however, with gasoline supply
building 1.9 million bbl compared with an estimated draw of 1.2 million bbl,
while distillate supply edged down 100,000 bbl that compared with an
anticipated 2.5 million bbl decline.
The Energy Information Administration will provide its more definitive
findings for the weekly change in inventory at 10:30 AM ET Wednesday.
In the Harbor, ultra-low sulfur diesel for transport on the Buckeye Pipeline
maintained basis at parity with August futures, with Colonial offtake at a
0.25cts premium. In the Gulf, 62-grade ULSD traded at 3.6cts discounts to
September futures to boost cash differential five points.
In the Harbor, F2 RBOB traded at a 1.0cts premium to August futures for both
prompt barge delivery and movement on the Buckeye Pipeline, while the cash
differential for H2 premium RBOB was unchanged at 16.0cts over futures. M2
conventional in the Harbor traded at a 1.5cts discount to August futures, with
cash differential weakening a steep 1.75cts on the trade. CBOB 308 regular
erased 1.1cts in cash differential for Buckeye movement to a 9.5cts discount to
In the Gulf, cycle 43 M2 conventional regular traded at a 2.5cts discount to
September futures, with cash differential strengthening 3.75cts with the
forward roll in the backwardated market. Cycle 43 A2 CBOB regular traded
actively at discounts to September futures of 8.85cts on the Houston Mercantile
Exchange to 9.0cts, where it ended for a 3.0cts gain in cash differential with
the move to September futures indexing.
Brian L. Milne, 1.609.371.3328, email@example.com, www.dtn.com. (c) 2017
DTN. All rights reserved.