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
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
Brent Dec. $61.95 -$0.77 $62.80 $61.86
Brent Jan. $61.82 -$0.73 $62.54 $61.73
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
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
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
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
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
CARB ULSD $1.9196
Conventional Regular $1.6282
Conventional Premium $1.9182
CARBOB Regular $1.6582
CARBOB Premium $1.9182
George Orwel, 1.718.522.3969, firstname.lastname@example.org, www.dtn.com. (c) 2017
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