Oil Prices Rise On Putin Remarks, ULSD Falls to 6-Week Low


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Crude oil and gasoline futures rose Wednesday (12/3) morning 
after comments by Russian President Vladimir Putin weighed on hopes of a quick 
diplomatic solution to the war in Ukraine. A U.S. inventory report by the 
American Petroleum Institute showing across-the-board builds limited gains. 
Diesel prices, meanwhile, continued to edge lower amid surging U.S. inventories.

   The NYMEX WTI contract for January delivery rose $0.57 bbl to $59.21 bbl, 
and ICE Brent for February delivery advanced $0.52 to $62.97 bbl.

   January RBOB gasoline futures rose $0.0114 to $1.8420 gallon. Front-month 
ULSD futures, in contrast, softened $0.0171 to $2.2960, the lowest since 
October 23.

   The U.S. Dollar Index plunged 0.391 points to 98.905 against a basket of 
foreign currencies.

   A diplomatic push by the U.S. to end the war in Ukraine removed some of the 
geopolitical risk premium to oil prices in recent days. On Tuesday, President 
Putin called European demands unacceptable and announced Russia will take 
measures against tankers of countries which help Ukraine. This came after the 
fourth Russia-linked tanker was struck in less than a week.

   The U.S.-led initiative took the wind out of a diesel rally which was 
sparked by the European Union announcing plans to ban imports of fuels made 
from Russian crude oil starting January 1, raising supply concerns against a 
backdrop of already low inventories. Front-month ULSD futures have softened by 
15% since peaking at a five-month high in mid-November.

   An API report released Tuesday showed petroleum inventories in the U.S. 
expanded last week. Commercial crude oil inventories grew by 2.48 million bbl 
in the week ended November 28, according to API data, while gasoline and 
distillate fuel oil stocks recorded another weekly build. The reported 2.88 
million bbl build to diesel and fuel oil inventories further added pressure to 
ULSD. Official U.S. government inventory data will be released by the Energy 
Information Administration at 10:30am ET today.




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