Afternoon Market Overview

Oil prices increased strongly on Friday with the complex ending the week modestly higher after increasing 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 even after a surprise draw in US crude oil stocks and 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 May WTI contract increased on the week and has broken out of the downward sloping linear regression trend channel to the upside. The May Brent contract increased more than the May WTI contract resulting in the May Brent/WTI spread widening by $0.77/bbl or 20.26 percent to $4.57/bbl by the end of the week. The May Brent/WTI spread moved into a new higher technical trading range last week.

The May WTI contract increased $3.46/bbl or 5.54 percent as total US crude oil stocks decreased versus a market expectation for a build. The spot May Brent contract increased by 6.4 percent or $4.24/bbl. The HO and RBOB crack spreads both appreciated versus WTI for the week as refined product inventories were modestly lower even with refinery run rates increasing. The widely followed 3-2-1 crack spread widened last week driven by the ULSD component.

On the distillate fuel front the April Nymex HO contract increased for the week by 5.58 percent or $0.1066/gal after a larger than expected draw in distillate fuel stocks.

Gasoline prices increased after gasoline inventories decreased on the week. The April Nymex gasoline price increased by 4.51 percent or $0.0877/gal this past week.