Market Report & Analysis for 4/24/2018 Afternoon Edition

by | Apr 23, 2018 | EMI, Fuels & Markets, FutureRack, Industry News

Afternoon Market Overview

Oil prices Ended Friday’s trading session slightly higher with the complex ending the week modestly higher after increasing strongly in value the previous week.

Oil prices increased across the board for the week. Last week both WTI crude oil and the spot Brent contract were higher with the June WTI contract increasing less than June Brent after a larger than expected draw in US crude oil stocks and in Cushing inventories. The June Brent/WTI spread widened last week with Brent trading at a strong premium to WTI. The June 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 May WTI contract increased on the week and remains in an upward sloping linear regression trend channel.

The June Brent contract increased more than the June WTI contract resulting in the June Brent/WTI spread widening by $0.41/bbl or 7.81 percent to $5.66/bbl by the end of the week. The June Brent/WTI remained in its current technical trading range last week. The May WTI contract increased $0.99/bbl or 1.47 percent as total US crude oil stocks decreased more than the market expectation. The spot June Brent contract increased by 1.59 percent or $1.07/bbl. The HO and RBOB crack spreads were mixed versus WTI for the week as refined product inventories were lower with refinery run rates decreasing.

The widely followed 3-2-1 crack spread widened last week driven by the RBOB component. On the distillate fuel front the May Nymex HO contract increased for the week by 1.09 percent or $0.0228/gal after a modest draw in distillate fuel stocks.

Gasoline prices increased even after gasoline inventories decreased on the week. The May Nymex gasoline price increased by 1.48 percent or $0.0305/gal this past week.