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MARKET PREVIEW: Oil Futures Reverse Lower Early Monday
11/20 7:37 AM
MARKET PREVIEW: Oil Futures Reverse Lower Early Monday NEW YORK (DTN) -- New York Mercantile Exchange oil futures eased early Monday as traders booked profits after Friday's rally, with the market mulling over the Organization of Petroleum Exporting Countries' summit next week that could end up extending production cuts beyond the March 2018 deadline. Reflecting confusion in the market, technical indicators are showing a downside short-term trend while money managers are still optimistic about OPEC's ability to rebalance the oil market and they are hoping oil prices will recover and move higher. Trade data from the Commodity Futures Trading Commission show money managers boosted their upside market risk to 545,485 contracts on a combination of 44,398 lots of fresh purchases and short covering in NYMEX oil futures during the week-ended Nov. 14. Traders are squaring their positions ahead of the expiration of the December NYMEX West Texas Intermediate crude contract later this afternoon. OPEC and their 10 non-OPEC producer allies will meet in Vienna on Nov. 30 to discuss market conditions and the future of their agreement to cut 1.8 million bpd in crude production, which has been in place since January. Their goal is to eliminate global oil surplus. Saudi Arabia and its Gulf allies are pushing for a nine-month extension of the agreement, a move that would push back expiration of the cuts to December 2018. Iran's oil minister Bijan Namdar Zanganeh also said most of the OPEC members now support the plan to extend the cuts. However, non-OPEC Russia remained unconvinced of the need to announce such an extension at the Nov. 30 summit. The Kremlin said it's too soon to make that decision after getting a pushback from their oil companies who are concerned about being hurt by the production cut policy. Alexander Novak, Russian oil minister who has been discussing the issue with Saudi energy minister Khalid al-Falih, said he would like to watch how market fundamentals shape up through the winter before announcing any extension of the output cuts. Citing secondary sources, OPEC said last week that its oil production fell by 151,000 bpd to 32.59 million bpd in October. The International Energy Agency said OPEC output declined by 470,000 bpd to 32.53 million bpd. Futures at 8:00 AM ET NYMEX Contract Last Change High Low WTI Nov. $56.24 -$0.31 $56.76 $56.15 WTI Dec. $56.48 -$0.37 $56.93 $56.25 ULSD Nov. $1.9246 -$0.0220 $1.9500 $1.9225 ULSD Dec. $1.9332 -$0.0220 $1.9522 $1.9249 RBOB Nov. $1.7357 -$0.0140 $1.7455 $1.7258 RBOB Dec. $1.7345 -$0.0163 $1.7480 $1.7237 ICE Brent Dec. $61.95 -$0.77 $62.80 $61.86 Brent Jan. $61.82 -$0.73 $62.54 $61.73 SPOT MARKETS Cash gasoline and diesel fuel prices closed the week in U.S. bulk market trading arenas mixed tracking an upside surge in December ULSD and RBOB futures. CARBOB in Los Angeles and San Francisco backtracked 1.90cts and 1.70cts, respectively on basis plunges, while Pacific Northwest suboctane soared 6.1cts on a 300pts basis boost. Gulf Coast RBOB climbed 4.10cts rated at an 8.75cts MERC discount, and New York Harbor RBOB edged 1.8cts higher easing nearly 200pts in basis. CBOB in Group 3 posted a 2.6cts advance, and tumbled 550pts in basis in Chicago that pared spot price by 2.40cts gallon. The rally in Pacific Northwest ULSD boosted spot price by nearly 7.0cts rated at a 6.0cts December futures premium. CARB ULSD in LA posted a 4.45cts gain, and ramped up 3.95cts in the bay. Chicago ULSD raced 8.7cts higher soaring 425pts in basis on a late Friday trade booked at a 0.75cts MERC discount. Group 3 ULSD posted a 2.7cts spot price advance versus a 50pts dip to a 5.5cts futures discount. Gulf Coast and New York Harbor ULSD values closely tracked the 4.45cts futures bounce. NEW YORK HARBOR GULF COAST Heating Oil $1.8321 Heating Oil $1.6946 ULS Heating Oil $1.8296 ULS Heating Oil $1.7491 ULSD $1.9196 ULSD $1.8491 Jet, 54-grade $1.8796 Jet, 54-grade $1.7671 Conventional Regular $1.7732 Conventional Regular $1.6782 RBOB $1.7452 Conventional Premium $1.8157 PBOB $1.8857 RBOB $1.6482 CBOB Regular $1.7432 PBOB $1.7557 CBOB Premium $1.9157 CBOB Regular $1.6457 CBOB Premium $1.7457 GROUP 3 ULSD $1.8596 CHICAGO Jet $1.8996 ULSD $1.9171 Suboctane Gasoline $1.6807 Jet $1.8096 Conventional Premium $1.8907 CBOB Regular $1.6907 Conventional Premium $1.9357 LOS ANGELES RBOB $1.7157 ULSD $1.8896 PBOB $1.9657 CARB ULSD $1.9346 Jet $1.8396 Conventional Regular $1.6707 PORTLAND Conventional Premium $1.8457 ULSD $2.0696 CARBOB Regular $1.6807 Jet $1.8496 CARBOB Premium $1.8457 Suboctane Gasoline $1.7957 Conventional Premium $2.1407 SAN FRANCISCO ULSD $1.9196 CARB ULSD $1.9196 Jet $1.8396 Conventional Regular $1.6282 Conventional Premium $1.9182 CARBOB Regular $1.6582 CARBOB Premium $1.9182 George Orwel, 1.718.522.3969, george.orwel@dtn.com, www.dtn.com. (c) 2017 DTN. All rights reserved.