PREVIEW:Oil Futures Pullback after Gains on Tighter Supply
3/21 7:45 AM
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. 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