The first 2024 futures' session is already a microcosm of the action seen during twelve months of 2023. Prices rallied higher initially but the gains gave way to moderate losses thanks to a lack of confidence in market stability.

February WTI traded for as much as $73.64/bbl but prices were around $70.76/bbl at just before 12:00 p.m. ET, reflecting a loss of 89cts/bbl. The plunge was helped by a very strong U.S. Dollar that put downward pressure on all commodities. Also hurting crude was a severe drop in U.S. equities, with particularly heavy damage in the tech-heavy NASDAQ.

Brent performed similarly with March prices rising to $79.06/bbl, only to recede to a $75.88/bbl low. At midday, March Brent was off 73cts/b $76.32/bbl.

Refined products were mixed. Some colder-than-normal weather lifted the European market and helped ULSD futures move modestly higher. The February contract was up 0.85cts/gal at $2.5374/gal after rising over $2.595/gal in the early morning.

Gasoline prices were weak as they often are in the poorest demand month of the year. Year-on-year comparisons will be interesting, since the end of 2022 saw gasoline demand of barely 8-million b/d. Higher run rates this year could lead to some inventory builds before a modest winter turnaround season commences.

February RBOB was off 0.78cts/gal at $2.0985/gal at midday but it traded as high as $2.1717/gal earlier in the session.

Cash markets saw light action with all venues giving up ground save for the Group 3 market where some buying pushed prices up by 2.60cts/gal. One positive that gasoline traders can cling to this January comes by way of large discounts for spot gasoline in several markets. Chicago gasoline is available for 41.5cts/gal off futures. Traders assume that this might limit further losses that come when high RVP fire sales generally occur.

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 Cory Wilchek, cwilchek@opisnet.com

(END) Dow Jones Newswires

January 02, 2024 13:00 ET (18:00 GMT)