PREVIEW:Oil Futures Pullback after Gains on Tighter Supply

    

   CRANBURY, N.J. (DTN) -- New York Mercantile Exchange nearest delivered oil 
futures and Intercontinental Exchange Brent futures moved lower in overnight 
trade, paring Wednesday's advance spurred by bullish weekly data released 
midmorning showing steep drawdowns in commercial crude and oil products in the 
United States.

   NYMEX West Texas Intermediate traded at a fresh four-month high overnight as 
the May contract assumed the front month position with Wednesday's expiration 
of the April contract, with the ICE Brent contract also resetting the 
four-month high overnight.

   The pause in the rally comes as WTI and Brent test higher resistance, with 
WTI above the $60 benchmark for the first time since November while Brent 
futures zeroes in on $70 bbl. Brent's premium continues to narrow against WTI, 
slipping to a 6-1/2 week low near $8.30 bbl overnight after the Energy 
Information Administration reported an 846,000 bpd surge in U.S. crude exports 
to 3.392 million bpd for the second week of March.

   EIA reported an unexpected and large 9.6 million bbl drawdown from 
commercial crude supply for the week profiled, while a year-on-year supply 
surplus narrowed 22.827 million bbl or 67% during the four weeks ended March 15 
to 11.2 million bbl or 2.6%. Gasoline and distillate fuel inventories also 
declined more than expected, both falling to 11-week lows, while gasoline 
stocks erased a year-on-year surplus. Total U.S. commercial crude and products 
stocks have dropped 45.21 million bbl or 3.6% since mid-January when they 
reached a 15-month high to a 1.2219 billion bbl 6-1/2 month low last week.

   Traders are cautious in moving higher amid concern over economic growth 
after the Federal Reserve adjusted down by 0.2% an expected expansion of the 
U.S. economy for this year to 2.1%. Fed Chairman Jerome Powell in a news 
conference Wednesday afternoon noted substantial economic slowdowns in China 
and Europe are a drag on U.S. economic growth.

   Offsetting the downgrade, the central bank held the federal funds rate at 
2.5% and signaled it is unlikely that there would be an interest rate hike this 
year, triggering a plunge in the U.S. dollar to a seven-week low. The dollar 
firmed in index trading.

   FUTURES at 8:00 AM ET


NYMEX       Contract                    Last         Change           High            Low
WTI         May                       $59.76         -$0.47         $60.33         $59.68
WTI         June                      $60.01         -$0.46         $60.57         $59.95
ULSD        April                    $1.9924       -$0.0157        $2.0125        $1.9916
ULSD        May                      $1.9952       -$0.0151        $2.0155        $1.9942
RBOB        April                    $1.9082       -$0.0084        $1.9174        $1.9034
RBOB        May                      $1.8891       -$0.0080        $1.8980        $1.8842
ICE
Brent       May                       $68.10         -$0.40         $68.69         $68.05
Brent       June                      $67.89         -$0.38         $68.48         $67.84

   SPOT PRODUCT MARKETS

   Cash gasoline and diesel fuel prices in U.S. spot markets posted a third day 
of across-the-board gains Wednesday, fueled by bullish weekly federal petroleum 
statistics.  

   Ongoing refinery issues and a 1.4 million bbl drawdown in PADD 5 gasoline 
stocks generated a 7.67cts surge in San Francisco CARBOB, and a 5.10cts advance 
in Los Angeles regular CARBOB. Portland suboctane regular ramped up 3.10cts 
rated at a 12.5cts MERC premium. 

   Gulf Coast 9.0-lb. regular no lead rallied 2.85cts trading ahead of pipeline 
scheduling at a 2.25cts April futures discount, and Chicago 9.0-lb. suboctane 
regular climbed 175pts to a 4.0cts MERC discount boosting spot price 4.10cts to 
$1.8766 gallon. Unleaded regular in New York Harbor and Group 3 CBOB posted 
2.35cts futures related gains. 

   San Francisco CARB ULSD rallied 2.27cts versus a penny futures discount, and 
moved 1.93cts above its Tuesday DTN closing range to $2.0553 gallon in the 
basin. Portland ULSD was provided a 1.77cts boost to $2.0031 gallon by the MERC 
rally.

   Gulf Coast ULSD eased 55pts to a 4.55cts futures discount limiting spot 
price to a 1.22cts advance, and climbed 1.92cts in the Harbor talked either 
side of the April futures print. Chicago ULSD sold at a 1.25cts futures premium 
boosting spot price 1.27cts to $2.0206 gallon, and finished in close proximity 
with the futures advance in Group 3 at $2.0231 gallon.


NEW YORK HARBOR                                       GULF COAST
Heating Oil                        $1.9599            Heating Oil                        $1.8024
ULS Heating Oil                    $1.9699            ULS Heating Oil                    $1.9244
ULSD                               $1.9924            ULSD                               $1.9469
Jet, 54-grade                      $1.9724            Jet, 54-grade                      $1.9199
Conventional Regular               $1.8507            Conventional Regular               $1.8857
RBOB                               $1.8207            Conventional Premium               $2.1257
PBOB                               $1.9432            RBOB                               $1.9557
CBOB Regular                       $1.8222            PBOB                               $2.1157
CBOB Premium                       $1.9932            CBOB Regular                       $1.8432
                                                      CBOB Premium                       $1.9932
GROUP 3
ULSD                               $2.0074            CHICAGO
Jet                                $2.0374            ULSD                               $2.0049
Suboctane Gasoline                 $1.8707            Jet                                $1.9624
Conventional Premium               $2.0932            CBOB Regular                       $1.8682
                                                      Conventional Premium               $2.0582
LOS ANGELES                                           RBOB                               $1.9282
ULSD                               $2.0374            PBOB                               $2.1482
CARB ULSD                          $2.0374
Jet                                $1.9924            PORTLAND
Conventional Regular               $2.0682            ULSD                               $1.9874
Conventional Premium               $2.1782            Jet                                $1.9924
CARBOB Regular                     $2.0832            Suboctane Gasoline                 $2.0332
CARBOB Premium                     $2.1782            Conventional Premium               $2.2832
SAN FRANCISCO
ULSD                               $1.9824
CARB ULSD                          $1.9824
Jet                                $1.9924
Conventional Regular               $2.0982
Conventional Premium               $2.3482
CARBOB Regular                     $2.0982
CARBOB Premium                     $2.3482

   Brian L. Milne, 1.609.371.3328, brian.milne@dtn.com, www.dtn.com. (c) 2019 
DTN. All rights reserved.