There was little enthusiasm on either the buy or sell side for petroleum futures this week, and prices for most contracts ticked lower Friday despite still-elevated tensions in the Middle East.
Crude-oil benchmarks were positive for most of the morning, but both Brent and West Texas Intermediate dipped lower around midday. The June WTI contract was off 38cts at $78.88/bbl. July Brent saw a value of $83.41/bbl reflecting a loss of 47cts. The declines took place despite fairly solid gains in the financial markets.
Gasoline has been lower most of the morning thanks to more than four months of demand numbers that trail last year by 1-1.5 percentage points.
June RBOB fell 1.75cts to $2.5243/gal. The losses since the April 12 high are only about 50% as substantial as the 2023 decline, but sources don't believe there is nearly as much "trapped length" in physical or paper gasoline. Cash markets were weaker in each of the seven bulk markets tracked by OPIS. The drops were mostly around 1.5cts/gal, with the Bay Area in California seeing a larger 2ct/gal drop.
Diesel continues to flounder. The June futures' contract eased 2.25cts to $2.4551/gal and cash markets were off 1.75-2.5cts. Much of the weakness in distillate appears to be inspired by global considerations. China recently authorized increases in export quotas for domestic refiners, so there are worries that pressure could be placed on Asian or European markets.
Some panic might set in should U.S. Gulf Coast diesel cracks narrow to less than $20/bbl above WTI-Cushing. Friday finds diesel fetching a price barely above $100/bbl, which keeps it about $21/bbl above WTI at Cushing. Sweet crude barrels in Houston are trading for about $1.75/bbl above futures, so the real distillate crack has already broken the $20/bbl mark.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
-- Reporting by Tom Kloza, tkloza@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com
(END) Dow Jones Newswires
05-10-24 1244ET
