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NYH, Gulf Spot Oil Products Notch Big Gains with Futures
7/25 5:18 PM
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 $50.20 bbl. 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 August futures. 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, brian.milne@dtn.com, www.dtn.com. (c) 2017 DTN. All rights reserved.