Market Report & Analysis for 12/19/17 Afternoon Edition

by | Dec 18, 2017 | EMI, Fuels & Markets, FutureRack, Industry News

Afternoon Market Overview

Oil prices were slightly lower across the board for the week ending Dec 15 with RBOB gasoline leading the complex lower. Last week both WTI crude oil and the spot Brent contract were lower with Brent declining marginally more than WTI even with the Forties pipeline system still shut down.

The February Brent/WTI spread narrowed slightly last week with Brent still trading at a strong premium to WTI and well off the lowest level of the year. The February Brent premium to WTI remains wide enough to keep the arb window open for select US crudes to work into the export market. The spot January WTI contract decreased on the week and but remains in its current technical trading range as did the February WTI contract.

The February Brent contract decreased more than the February WTI contract resulting in the February Brent/WTI contract narrowing by $0.061/bbl to $5.90/bbl by the end of the week. The February Brent/WTI spread remained in its current technical trading range last week. The HO and RBOB crack spreads depreciated versus WTI for the week. The widely followed 3-2-1 crack spread also narrowed last week driven by the RBOB component.

The January WTI contract decreased $0.06/bbl or 0.1 percent even as total US crude oil stocks decreased more than the market expectations. The spot February Brent contract decreased by 0.17 percent or $0.27/bbl.

On the distillate fuel front, the January Nymex HO contract decreased for the week by 1.31 percent or $0.0253/gal even as distillate fuel inventories decreased within the market expectation. Gasoline prices decreased after gasoline inventories increased on the week. The January Nymex gasoline price decreased by 3.6 percent or $0.0618/gal this past week.