Afternoon Market Overview

Oil prices decreased strongly on Friday with the complex ending the week lower after decreasing in value the previous week. Oil prices decreased across the board for the week. Last week both WTI crude oil and the spot Brent contract were lower with the June WTI contract decreasing more than June Brent after a larger than expected build in US crude oil stocks and in Cushing stocks.

The June Brent/WTI spread widened last week with Brent trading at a modest 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 decreased on the week and remains in the downward sloping linear regression trend channel to the downside. The June Brent contract decreased less than the June WTI contract resulting in the June Brent/WTI spread widening by $0.54/bbl or 12.1 percent to $5.01/bbl by the end of the week. The June Brent/WTI spread moved into a new higher technical trading range last week.

The May WTI contract decreased $2.88/bbl or 4.43 percent as total US crude oil stocks increased versus a market expectation for a smaller build. The spot June Brent contract decreased by 3.22 percent or $2.23/bbl.

The HO and RBOB crack spreads both appreciated versus WTI for the week even as refined product inventories were mixed 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 May Nymex HO contract decreased for the week by 3.13 percent or $0.0659/gal after a build in distillate fuel stocks. Gasoline prices decreased even after gasoline inventories decreased on the week.

The May Nymex gasoline price decreased by 3.26 percent or $0.0659/gal this past week.