Nymex Overview: Muddled Refining Picture Depresses Crude; RBOB and ULSD Up -- OPIS
17 January 2024 - 4:48AM
Dow Jones News
Severe winter weather impacts on refining operations at the U.S.
Gulf Coast, New York Harbor and across the U.S. Midcontinent are a
work in progress Tuesday after some of the most brutal temperatures
in years. It's not clear whether refinery downtime will be measured
in hours, or days and weeks, but sellers have withdrawn offers
until the processing picture becomes clear.
Buyers are not chasing crude even though there was further
violence in the Middle East over the weekend with more Houthi
attacks on shipping as well as a Houthi missile strike in Iraq.
Crude oil benchmarks moved higher after that news, but lower
numbers were witnessed in the last few hours. Any refinery downtime
will impact U.S. crude stocks which remain quite high when compared
to historical commercial levels.
A strong dollar is also impacting crude benchmarks. February
West Texas Intermediate was down 27cts at $72.41/bbl while March
Brent gained 16cts to $78.31/bbl.
The day began with widespread reports of a fire and explosion at
the Phillips 66 Bayway, N.J., refinery, but it wasn't clear how
much gasoline and distillate production was affected. Refined
products margins widened thanks to a 3.8ct surge in February ULSD
to $2.7073/gal. The February RBOB contract rose 2.93cts to
$2.1496/gal. While there is talk of as many as a dozen refineries
that suffered cold weather problems, traders looking ahead see a
warmer-than-normal week from Jan. 22 until month's end.
Beyond the futures market, Gulf Coast gasoline saw basis
discounts narrow to 8.5cts, putting spot CBOB around $2.065/gal. It
appeared as though problems with power in Port Arthur and Galveston
Bay, Texas, were behind the stronger numbers.
This week is seeing a lot of diesel molecules head to the
heating oil market, but the colder-than-normal temperatures on the
Eastern Seaboard are likely to give way to a more temperate
forecast shortly.
So far Tuesday, there have been no additional reports of
U.S./Houthi encounters. Any such headlines could turn crude markets
around quickly, observers say.
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
January 16, 2024 12:33 ET (17:33 GMT)
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