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PREVIEW: Oil Futures DN, Products Slide after Testing High
4/23 7:38 AM
PREVIEW: Oil Futures DN, Products Slide after Testing Highs CRANBURY, N.J. (DTN) -- Nearest delivered oil futures traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange moved lower overnight following Friday's advance, with the RBOB and ULSD contracts reversing lower after testing last week's multi-month highs at $2.0987 and $2.1285 gallon, respectively. "Oil is pulling back a bit today on reports by private forecasters of a build in Cushing Oklahoma supply," said Chicago-based Phil Flynn, senior market analyst with the Price Futures Group. The Energy Information Administration last week reported Cushing oil inventory was drawn down 1.1 million bbl during the week-ended April 13 to 34.9 million bbl, which was the first draw since early March. Stock changes at Cushing are closely watched since it serves as the delivery location for NYMEX West Texas Intermediate futures. NYMEX June WTI futures are nearest to delivery following the May contract's expiration Friday (4/20) afternoon. A strengthening U.S. dollar, trading at a more than seven-week high this morning, is also weighing on WTI futures. While pulling back amid overbought technical pressure, WTI and Brent futures remain in backwardation, a bullish market structure. "Geopolitical risks abound as well. The big May 12 decision by the Trump Administration to decide whether it will leave a nuclear deal with Iran and hit them with more sanctions. Yet, we also have Syria and Yemen that is on the back burner as well as heightening tensions between Israel and Iran," said Flynn. U.S. President Donald Trump will meet with French President Emmanuel Macron on Tuesday and German Chancellor Angela Merkel on Friday, when it's expected Europe's two leaders will attempt to persuade Trump to keep the United States in the Iranian nuclear accord reached in 2015 during the Obama administration. Trump set a May 12 deadline for major changes to be made to the accord, including a greater scope for international inspections of Iran's nuclear facilities, Iran's ballistic missiles program, and the timeline allowing Tehran to resume its nuclear program. Absent these changes, Trump said he would withdraw from the accord, which would re-impose sanctions on Iran. Analysts' estimate sanctions could cut Iranian crude exports, currently at about 3.8 million bpd, by 350,000 bpd. The White House meetings with the heads of state follows an attack earlier this month by the Syrian regime using chemicals weapons against a rebel enclave that also targeted civilians in the country's seven-year civil war. U.S., French, and British military forces responded with missile strikes that destroyed three facilities tied to Syria's chemical weapons activities. Iran and Russia are allies of Syrian President Bashar Assad. Futures at 8:00 AM ET NYMEX Contract Last Change High Low WTI June $68.23 -$0.17 $68.45 $67.84 WTI July $68.09 -$0.09 $68.28 $67.69 ULSD May $2.1218 -$0.0012 $2.1263 $2.1078 ULSD June $2.1136 -$0.0017 $2.1180 $2.0994 RBOB May $2.0950 -$0.0009 $2.0955 $2.0811 RBOB June $2.0982 -$0.0016 $2.0996 $2.0852 ICE Brent June $74.10 $0.04 $74.15 $73.50 Brent July $73.39 $0.04 $73.45 $72.81 SPOT PRODUCT MARKETS Spot market oil product prices closed a lightly traded Friday session higher east of the Rockies, and logged-in mixed results on the U.S. West Coast. Gulf Coast 7.8-lb. RBOB posted a 2.35cts advance improving 50pts to a 3.5cts basis discount, and 9.0-lb. RBOB in New York Harbor ramped up 2.0cts trading at a penny May futures discount to prompt barge. Summer quality CBOB in Group 3 climbed 2.1cts, and 9.0-lb. Chicago suboctane posted a 1.6cts gain indexed 8.0cts below the May RBOB futures print. San Francisco regular CARBOB eased a fraction on a 200pts decline in basis, and moved 0.85cts above its Thursday DTN posting in Los Angeles rated at a 16.5cts MERC premium. Suboctane regular basis in Portland held steady at a 17.0cts futures premium that boosted flat price by 1.85cts to $2.2659 gallon. Open market ULSD in Chicago edged 0.99cts higher, easing 25pts in cash differential in trading at a 3.75cts futures discount, while the remainder of east of the Rockies diesel fuel values maintained close parity with the $2.1230 gallon May ULSD futures closing price. Prompt ULSD in Portland toppled 450pts in basis and 3.14cts in spot price, rated at a 19.0cts May futures premium, and CARB ULSD in the Bay rode the 1.36cts futures bounce higher, rated at a 6.0cts MERC premium. CARB ULSD in Los Angeles climbed 1.35cts higher, tagged 8.5cts over the June ULSD futures print at $2.2002 gallon. NEW YORK HARBOR GULF COAST Heating Oil $2.0593 Heating Oil $1.9431 ULS Heating Oil $2.0893 ULS Heating Oil $2.0368 ULSD $2.1293 ULSD $2.0768 Jet, 54-grade $2.1593 Jet, 54-grade $2.0586 Conventional Regular $2.0725 Conventional Regular $2.0275 RBOB $2.0850 Conventional Premium $2.1575 PBOB $2.2175 RBOB $2.0600 CBOB Regular $2.0050 PBOB $2.2110 CBOB Premium $2.1850 CBOB Regular $2.0175 CBOB Regular 7.8 $2.0400 CBOB Premium $2.2050 CBOB Premium 7.8 $2.2225 A2 CBOB $1.9650 D2 CBOB $2.1525 GROUP 3 ULSD $2.1018 Jet $2.0843 CHICAGO Suboctane Gasoline $1.9675 ULSD $2.0831 Conventional Premium $2.1725 Jet $2.1118 CBOB Regular $2.0125 LOS ANGELES Conventional Premium $2.2775 ULSD $2.1986 RBOB $2.1225 CARB ULSD $2.1986 PBOB $2.3125 Jet $2.1543 Conventional Regular $2.2550 Conventional Premium $2.4150 PORTLAND CARBOB Regular $2.2600 ULSD $2.3118 CARBOB Premium $2.4150 Jet $2.1843 Suboctane Gasoline $2.2650 SAN FRANCISCO Conventional Premium $2.6200 ULSD $2.1818 CARB ULSD $2.1818 Jet $2.1543 Conventional Regular $2.1900 Conventional Premium $2.4800 CARBOB Regular $2.2200 CARBOB Premium $2.4800 Brian L. Milne, 1.609.371.3328, brian.milne@dtn.com, www.dtn.com. (c) 2018 DTN. All rights reserved.