Market Report & Analysis for 3/13/2018 Afternoon Edition

by | Mar 12, 2018 | EMI, Fuels & Markets, Industry News

Afternoon Market Overview

Oil prices increased strongly on Friday with the complex ending the week modestly lower after declining 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 May WTI contract increasing less than May Brent after a larger than expected build in US crude oil stocks and a smaller than expected decline in Cushing stocks.

The May Brent/WTI spread widened last week with Brent trading at a modest premium to WTI. The May 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 April WTI contract increased on the week and remains in the downward sloping linear regression trend channel. The May WTI contract traded in sync with the April contract. The May Brent contract increased more than the May WTI contract resulting in the May Brent/WTI spread widening by $0.29/bbl or 8.84 percent to $3.57/bbl by the end of the week. The May Brent/WTI spread remained in its current technical trading range last week.

The April WTI contract increased $0.79/bbl or 1.29 percent as total US crude oil stocks increased more than the market expectations. The spot May Brent contract increased by 1.74 percent or $1.12/bbl. The HO and RBOB crack spreads both depreciated versus WTI for the week as refined product inventories were mixed with refinery run rates decreasing. The widely followed 3-2-1 crack spread narrowed last week driven by the RBOB component.

On the distillate fuel front, the April Nymex HO contract increased for the week by 0.37 percent or $0.0070/gal after a small draw in distillate fuel stocks. Gasoline prices increased after gasoline inventories decreased on the week. The April Nymex gasoline price increased by 0.15 percent or $0.0029/gal this past week.