Midwest Spot Market Oil Product Prices Extend Down Cycle
BURLINGTON, Vt. (DTN) -- Oklahoma Group 3 and Chicago spot market gasoline
and diesel fuel prices continued to explore lower depths Wednesday, tracking a
fresh downturn in July RBOB and ULSD oil futures on the New York Mercantile
Business remained brisk in both heartland markets.
NYMEX oil futures remained out of favor with market speculators, who sent
paper prices tumbling in the aftermath of weekly oil supply data published
midmorning by the U.S. Energy Information Administration. The EIA report
detailed drawdowns in domestic crude oil and gasoline stockpiles and a seasonal
build in supplies of middle distillate fuel grades that corresponded
directionally with early week expectations of market analysts.
U.S. distillate fuel inventories ramped up 1.1 million bbl with a 97,000 bpd
increase in production and a 26,000 bpd boost in imports countering an 113,000
bpd increase in implied demand.
The EIA reported a 547,000 bpd surge in implied gasoline demand and a
578,000 bbl drawdown in total gasoline stocks. A supply and demand balance was
achieved by a 320,000 bpd output boost and a 335,000 bpd increase in gasoline
Regionally, PADD 2 gasoline stocks fell 200,000 bbl, and ultra-low sulfur
diesel fuel storage levels eased by 100,000 bbl.
EIA statistics showed a 2.5 million bbl week-over-week drawdown in domestic
crude oil stocks and a 1.1 million bbl decline in crude oil stocks at Cushing,
Oklahoma, as part of the overall mix. Crude oil imports fell by 149,000 bpd and
U.S. oil refiners trimmed usage by 0.4%, running at 94.0% of capacity last week.
July ULSD futures tumbled 3.01cts to close today's formal trading session at
$1.3648 gallon, and the spot month RBOB futures contract moved 1.35cts lower to
$1.4105 gallon at settlement. August WTI futures registered a $0.98 loss
settling at $42.53 bbl at the regular market close.
Chicago P91 high-octane no lead was reported sold midday for prompt generic
pipeline delivery at a 24.0cts July futures premium that was designated a "fake
trade" by a regional source who brokered a prompt P91 deal this afternoon at a
12.5cts MERC premium that sent spot price plummeting 12.85cts to $1.5355
gallon. CBOB improved a penny in basis trading for third cycle June Wolverine
Pipeline specific delivery at a 4.25cts futures discount that trimmed spot
price by 0.35cts to $1.3680 gallon. RBOB changed hands for prompt generic
pipeline delivery 10.0cts over the July futures print that pared flat price by
1.85cts to $1.5105 gallon.
Group 3 X-grade ultra-low sulfur diesel fuel fell a penny in basis trading
at a 5.75cts futures discount for Magellan Pipeline offtake that sent spot
price plunging 4.01cts to $1.3073 gallon.
ULSD in Chicago backtracked 3.51cts to a notional $1.3448 gallon, rated at a
2.0cts July futures discount for third cycle generic pipeline delivery.
G.Bud deGorgue, 1.802.524.1784, firstname.lastname@example.org, www.dtn.com. (c) 2017
DTN. All rights reserved.