Trading in consolidation mode after OPEC+ production cuts
- Refined product futures retreat from early gains
- Crude contracts also pull back
- Trading in consolidation mode after OPEC+ production cuts
- WTI and Brent contracts show contango structure
- WTI rises to morning high of $74.10 a barrel
- Brent maintains nearly $5 premium to WTI
- Gasoline and distillate futures mostly unchanged
- East Coast spot markets see small declines, West Coast markets see increases
- Lower-priced diesel coming from Gulf Coast refineries
- Colonial’s distillate line space remains at 13.5 cents over tariffs
Refined product futures retreated from early gains and were clinging to small increases at midday Tuesday. Crude contracts also pulled back. Trading was reasonably strong based on volume estimates and appears to be in consolidation mode as traders continue to digest last week’s voluntary production cuts from OPEC+ members. The West Texas Intermediate contract has seen a little more contango developing through the first quarter, suggesting that supplies appear to be comfortable. Brent also has begun to show a bit of the same structure. The WTI contango through May and that contract is priced at about a 50ct premium to the NYMEX January WTI contract. The January contract rose to morning high of $74.10 a barrel, but was posting more modest gains by midday. WTI has traded in a roughly $2 range so far on Tuesday and was up just over 50 cents to $73.56/bbl as of 11:50 a.m. ET. February Brent has also given back most of the morning’s dollar-plus gains. February Brent was 31 cents higher at $78.34/bbl near midday, while March was about even with February. Brent’s nearly $5 premium to WTI is likely to continue to support U.S. crude exports. Gasoline and distillate futures, which were at times Tuesday morning posting gains of more than 3 cents/gal, were mostly unchanged as midday approached. The NYMEX January RBOB contract reached a morning high of $2.1662, but fell back to trade down 0.18 cent to $2.1324/gal just before noon. The small paper declines have moved through the East of the Rockies spot markets, while the West Coast markets are posting some sizeable increases, most notably in Los Angeles, where cash gasoline prices are nearly 10 cents higher as premiums to the screen have widened on reports of flaring at Marathon Petroleum’s Los Angeles refiner. The NYMEX January ULSD contract also backed off early gains and at midday was mostly unchanged at $2.6602/gal. There is some lower-priced diesel coming from Gulf Coast refineries, where the product is approaching a 30-cent discount to the front-month ULSD contract. Prompt Gulf Coast diesel was pricing about 34 cents/gal below New York Harbor quotes. The cost of line space on Colonial’s distillate line remains at 13.5 cents over tariffs.
Public Companies:
Private Companies: undefined, undefined
Key People: Denton Cinquegrana (Reporter), Jeff Barber (Editor)
Factuality Level: 7
Justification: The article provides information about the current state of the oil market, including the performance of crude contracts and the impact of OPEC+ production cuts. It also mentions the contango in the West Texas Intermediate contract and the premium of Brent over WTI. The article includes some trade sources’ expectations for oil export data and the pricing of gasoline and distillate futures. Overall, the article provides factual information about the oil market, but it lacks in-depth analysis and context.
Noise Level: 3
Justification: The article provides a lot of specific information about the trading of refined products and crude contracts, but it lacks context and analysis. It mainly focuses on price movements and trading volumes without providing a deeper understanding of the factors driving these changes. The article also includes some irrelevant information about flaring at a specific refinery and the cost of line space on a distillate line, which is not directly related to the main topic of the article.
Financial Relevance: Yes
Financial Markets Impacted: The article provides information on the trading of crude oil contracts and the potential impact on U.S. crude exports.
Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article focuses on the trading and pricing of crude oil contracts, indicating the relevance to financial markets. There is no mention of any extreme events.
www.marketwatch.com 
