Petroleum futures were posting modest moves at midday Monday as traders continue to assess the potential impact of additional OPEC+ production cuts.
Voluntary cuts agreed to last week by OPEC and its allies came as a disappointment to market bulls, who point to the cartel’s failure to include strong actions to enforce compliance with the proposed output reductions.
Crude futures swung between gains and declines in morning trading at were lower near midday. The NYMEX January West Texas Intermediate contract was 52 cents at $73.55 a barrel, while February Brent was down 42 cents at $78.46/bbl. The planned additional OPEC+ cuts won’t be implemented until January and the market likely won’t get its first reading on compliance levels for another two months or so.
Refined products were modestly higher despite weaker crude. Timing is right for a contra-seasonal gasoline bottom that often serves as a launch pad for a late winter/early spring rally. NYMEX RBOB futures fell to an off-season low of $2.0204 a gallon on Dec. 12, 2022, and could approach a similar low in the coming days. Just ahead of midday, the NYMEX January RBOB contract was up 1.18 cents to $2.1329/gal.
U.S. spot gasoline prices were largely following the NYMEX, with the exception of Southern California, where the spot price for Los Angeles CARBOB was down 2.5c/gal. All other markets were 1ct to 1.25 cents higher in quiet trading.
Wholesale prices are now in the 1.75-$1.99/gal range for E10 or its reformulated equivalent in 33 states. Cheap gasoline has even infiltrated some Rocky Mountain markets. Retail prices wobbled aimlessly on the weekend but OPIS MarginPro data points to about a 1-cent drop in retail prices so far on Monday.
The NYMEX January ULSD contract was up 1.05 cents to $2.672/gal. Temperature forecasts for the U.S. Northeast were close to normal and cash prices for diesel were up by 0.5 cent to 1.25c/gal in all U.S. bulk markets.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
–Reporting by Tom Kloza, [email protected]; Editing by Jeff Barber, [email protected]
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