Oil and refined product futures got off to a bit of a slow start, but as midday approaches the velocity of gains has started to pick up as refined product futures are angling toward five straight sessions of increases.

January West Texas Intermediate crude is expiring Tuesday, so volumes are non-existent for the contract, but even with light volumes, the January and February contracts are moving similarly. While the January WTI volumes are thin, that could be a good description for the entirety of the petroleum complex.

While the rerouting of ships around Africa's Cape of Good Hope instead of through the Red Sea may create tighter supplies, a boost in oil prices may be more likely from the impact on freight rates and the increase in shipping time.

However, if the rerouting persists for several months, analysts believe this could provide upward pressure on prices.

Just ahead of midday, WTI and Brent were trading at or near the highs of the day with Brent posting slightly better increases. That is widening the spread between the two benchmarks which has now widened five straight days and is now greater than $5/bbl.

January WTI was last at $73.98/bbl, up $1.50. The February contract traded up to $74.42/bbl earlier and has trickled back slightly to $74.19, up $1.37.

February Brent is trading higher by $1.49 at $79.44/bbl as Brent prices are running up against Monday's highs.

Refined product futures are also trading higher, with ULSD for the time being outpacing the gains in RBOB as January and February are up either side of 5cts.

The lightly traded January contract is up 5.02cts at $2.723/gal with the February contract at $2.6974/gal, a 4.66ct increase.

The RBOB contract is up consistently by 3.0-3.5cts throughout much of the 2024 contracts. Currently, the January contract is up 3.39cts at $2.1929/gal with February up 3.47cts at $2.2022/gal. Both contracts and much of the 2024 gasoline contracts are within 25 points of the earlier highs.

Cash markets have not seen much movement Tuesday, but Gulf Coast gasoline continues to see its discount get whittled down and the prompt cycle is currently valued 17.5cts. At midday the only gasoline market in the red is San Francisco as CARBOB prices are off about a half cent.

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 Denton Cinquegrana, dcinquegrana@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com

(END) Dow Jones Newswires

December 19, 2023 12:56 ET (17:56 GMT)