Nymex Overview: Futures See Robust Increases Despite Low Volume Trading -- OPIS
27 December 2023 - 4:39AM
Dow Jones News
Oil prices immediately fired about 2.5% higher Tuesday, but
they've been metaphorically treading water since that initial move,
with modest increases across the barrel.
Tensions between the U.S. and Iran are the primary motivation
for reluctance among sellers Tuesday, although there is also a
strong tradition of price hikes in the first third of any new
year.
The U.S. launched attacks against Iranian backed militias and
that came after some threats of disruptions in shipping in the
Mediterranean. Late this morning, the Wall Street Journal reported
that Iran had decided to triple its production rate for
near-weapons-grade uranium, and that's a practice that could
further deteriorate the relationship between the U.S. and the
Islamic republic. There's a sense that the White House is seeing
more reasons to tighten sanctions and thereby limit oil revenue
from Iran.
Crude oil futures moved sharply higher on a day that was devoid
of other news. February West Texas Intermediate rose $2.30 to
$75.86 a barrel, while February Brent added $2.29 to
$81.36/bbl.
Refined products trading was calm, but both diesel and gasoline
added 4-5cts a gallon in the morning session. There is a history of
first quarter rallies for RBOB futures and the January contract
added 4.18cts to $2.1719/gal.
Diesel was strong, particularly when one considers that very few
distillate molecules have gone to winter heating purposes. January
futures were up 4.52cts at $2.7064/gal. There are no signs of a
polar vortex as far as one can see into January, but diesel moved
up thanks to the cost increases for crude.
Cash markets saw additions in all seven bulk markets. The
strongest arena was Chicago where a cycle change lifted gasoline by
nearly 15cts/gal. Most other markets added 4-7cts/gal.
Diesel moved up by 4-7cts/gal in most markets although Group 3
ULSD rose a modest 1-1.25cts/gal.
In the last week of 2023, markets are sporting modest deflation
for diesel and jet fuel, with bulk gasoline prices almost identical
to where they were a year ago. OPIS finds most diesel numbers to be
around 14% lower than Boxing Day 2022 with jet fuel about 24%
cheaper.
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, tkloza@opisnet.com; Editing by Michael
Kelly, mkelly@opisnet.com
(END) Dow Jones Newswires
December 26, 2023 12:24 ET (17:24 GMT)
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