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NYMEX Oil Futures Retreat on Profit-taking, Stronger USD
11/20 9:05 AM
NYMEX Oil Futures Retreat on Profit-taking, Stronger USD NEW YORK (DTN) -- New York Mercantile Exchange oil futures slumped Monday morning, led by a selloff in ULSD futures amid profit-taking after Friday's rally while the U.S. dollar strengthened, with the currency trading at a four-day high. Technical indicators show oil futures in a short-term downtrend. The selloff comes on the first day of the abbreviated trade week, with the market closed Thursday for Thanksgiving. The decline also comes ahead of this afternoon's expiration of the December West Texas Intermediate crude oil contract, with the January contract trading at about a 20cts bbl premium to the expiring December contract. At last look, NYMEX December WTI crude oil futures had declined 43cts to $56.12 bbl and the January contract fell 45cts to $56.26 bbl. January Brent crude eased 82cts to $61.90 bbl on the Intercontinental Exchange, with the premium to WTI tightening to $5.78 bbl. NYMEX December ULSD futures dropped 3.01cts to $1.9165 gallon and December RBOB futures slipped 1.27cts to $1.7320 gallon. Support for ULSD futures is pegged at $1.8824 gallon and at $1.7242 gallon for RBOB futures. Money managers remain optimistic, which is reflected in trade data from the Commodity Futures Trading Commission showing money managers boosted their upside 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. Lower trade early Monday also comes ahead of the Organization of the Petroleum Exporting Countries meeting on Nov. 30 in Vienna. OPEC and the 10 non-OPEC producing countries will meet to discuss market conditions and the future of their pact to cut 1.8 million bpd in production that has been in place since January. Their goal is to eliminate a surplus in oil inventories held by the Organization for Economic Cooperation and Development. 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 this morning said most of the OPEC members 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 thinks 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 energy minister who has been discussing the issue with Saudi energy minister Khalid al-Falih, said he would like to see how 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. George Orwel, 1.718.522.3969, george.orwel@dtn.com, www.dtn.c,om. (c) 2017 DTN. All rights reserved.