ULSD Futures Hit 5-Month Highs Amid Russia Sanctions


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude futures rose more than 1% on Tuesday (11/18) as 
the widening effect of U.S. sanctions on Russia took the market's focus off 
global oversupplies. 

   The front-month NYMEX USLD futures contract price closed near five-month 
highs due to expectations of limited supplies driven by sanctions on Russian 
crude trade and recent  Ukraine drone attacks on Russian energy infrastructure.

   The NYMEX WTI contract for December delivery settled up 83 cents, or 1.4%,  
at $60.74 bbl. ICE Brent for January delivery rose $0.70 to $64.90 bbl.

   December RBOB gasoline futures contract price climbed $0.0094 to $1.9995 
gallon. Front-month ULSD futures, meanwhile, were up $0.1489 to $2.6959 gallon 
after soaring earlier to $2.7089 -- their highest since June.

   The U.S. Dollar Index was down 0.028 points to 99.46 against a basket of 
currencies, adding to the bullish sentiment in commodity markets.

   Bloomberg reported Tuesday that state-owned refineries in China have paused 
imports of Russian crude ESPO.

   This action precedes a November 21 deadline set by the U.S. Department of 
the Treasury to act against oil transporters and consumers that continue  
trading  with sanctioned Russian energy firms Rosneft and Lukoil.

   The U.S. Senate is also planning to approve a bill that would authorize U.S. 
President Donald Trump to impose tariffs to imports countries that purchase 
Russian oil, aiding Moscow's war against Ukraine.

   "It's all about the impact of what's coming around with that November 21 
deadline, and after," John Kilduff, partner at New York energy hedge fund Again 
Capital, told DTN.

   A wave of Ukraine drone attacks has disrupted refinery operations in Russia, 
pushing European and Asian refining margins to two-year high, according to 
media reports. Last week, a missile strike briefly halted loading operations at 
Russia's Novorossiysk oil hub in the Black Sea.

   Sanctions targeting Russian oil and businesses have outweighed some of the 
bearish sentiment in crude markets triggered by a global oversupply outlook.

   In October, the International Energy Agency estimated global crude 
production at 6.2 million bpd higher than at the start of the year.  The 
Organization of the Petroleum Exporting Countries has projected a 500,000-bpd 
crude surplus for the third quarter, reversing the 400,000-bpd deficit it 
forecasted in October.




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