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PREVIEW: Oil Futures Seesaw with Focus on Supply Glut
4/21 7:36 AM
PREVIEW: Oil Futures Seesaw with Focus on Supply Glut NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures seesawed within a tight range during overnight into early Friday trade, but the futures complex is on course for the largest weekly loss in a month amid extreme market volatility registered on doubts the Organization of Petroleum Exporting Countries and non-OPEC will agree to extend their agreement to cut production by 1.8 million bpd beyond the planned June 30 expiration. Saudi Arabian oil minister Khalid al-Falih attempted to jawbone prices higher on Thursday when he said Gulf Cooperation Council members who comprise six of the 13 countries that are OPEC members have agreed to extend their production cuts to the full year. Falih was careful to add that the entire cartel membership has not yet agreed to the extension period that does not necessarily have to be for six more months. OPEC has scheduled a May 25 meeting to discuss the issue. But even if OPEC agrees to extend cuts of 1.2 million bpd, the 11 non-OPEC producers who agreed last year to cut 558,000 bpd of their own supply may not be willing to agree to extending reduced output reductions. Non-OPEC Russia agreed to cut 300,000 bpd has only met 250,000 bpd of its pledge, and Moscow appears nonchalant over the potential extension of its crude oil output. Meanwhile, crude oil production in the United States rose last week by 17,000 bpd to 9.252 million bpd, and to a 299,000 bpd year-over year increase, according to the Energy Information Administration. U.S. crude oil output has steadily increased, and a new rig-count report due later today from Houston-based oil services firm Baker Hughes, Inc. should provide another indication on the direction of production moving forward. NYMEX GLOBEX AT 8:00 AM ET Last Change High Low June WTI crude $50.60 -$0.11 $50.86 $50.51 July WTI crude $51.06 -$0.10 $51.22 $50.87 May ULSD $1.5756 -$0.0033 $1.5816 $1.5719 June ULSD $1.5855 -$0.0028 $1.5891 $1.5784 May RBOB $1.6775 $0.0024 $1.6775 $1.6672 June RBOB $1.6761 $0.0016 $1.6779 $1.6671 ICE FUTURES June Brent crude $52.94 -$0.05 $53.17 $52.76 July Brent crude $53.41 -$0.05 $53.63 $53.25 SPOT PRODUCT MARKETS Spot market gasoline prices in U.S. cash trading regions moved mostly higher on Thursday while diesel fuel values posted mixed results tracking a choppy oil futures trading session. Pacific Northwest suboctane regular bucked the futures rebound moving 1.35cts lower on a 250pts basis pullback. CARBOB in San Francisco improved 300pts in basis that boosted spot price by 4.15cts, and matched the 1.15cts May RBOB futures advance in Los Angeles rated at a 400pts cash differential. Midwest CBOB rallied 2.15cts in Group 3 and by 3.65cts in Chicago where basis climbed 250pts to a 9.0cts MERC discount. New York Harbor and Gulf Coast RBOB values posted gains a fraction above the advance in benchmark May RBOB futures. CARB ULSD on the West Coast basin and bay markets tracked closely the downturn in May ULSD futures, and ULSD in the PNW gained a penny in cash differential indexed at a 10.5cts MERC premium. Moderate basis gains provided a boost to ULSD at the Gulf and in Chicago, while modest price declines were registered in the Harbor and Group 3 on softening prompt cash differentials. NEW YORK HARBOR GULF COAST Heating Oil $1.5081 Heating Oil $1.4169 ULS Heating Oil $1.5106 ULS Heating Oil $1.4871 ULSD $1.5681 ULSD $1.5521 Jet, 54-grade $1.5306 Jet, 54-grade $1.5031 Conventional Regular $1.6325 Conventional Regular $1.6175 RBOB $1.6690 Conventional Premium $1.7875 PBOB $1.8375 RBOB $1.6475 CBOB Regular $1.5775 PBOB $1.8150 CBOB Premium $1.7625 CBOB Regular $1.5925 CBOB Regular 7.8 $1.6175 CBOB Premium $1.7765 CBOB Premium 7.8 $1.8325 A2 CBOB $1.5400 D2 CBOB $1.7275 GROUP 3 ULSD $1.5866 CHICAGO Jet $1.4806 ULSD $1.5656 Suboctane Gasoline $1.5500 Jet $1.6006 Conventional Premium $1.8250 CBOB Regular $1.5875 Conventional Premium $1.7775 LOS ANGELES RBOB $1.7075 ULSD $1.6305 PBOB $1.8625 CARB ULSD $1.6355 Jet $1.5781 Conventional Regular $1.7075 PORTLAND Conventional Premium $1.9875 ULSD $1.6806 CARBOB Regular $1.7175 Jet $1.5781 CARBOB Premium $1.9875 Suboctane Gasoline $1.7975 Conventional Premium $2.0775 SAN FRANCISCO ULSD $1.6056 CARB ULSD $1.6056 Jet $1.5481 Conventional Regular $1.8175 Conventional Premium $2.0875 CARBOB Regular $1.8175 CARBOB Premium $2.0875 George Orwel, 1.718.522.3969, george.orwel@dtn.com, www.schneider-electric.com. (c) 2017 Schneider Electric. All rights reserved.