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
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, firstname.lastname@example.org, www.dtn.c,om. (c) 2017
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