Petroleum futures were rising for a second straight day on Tuesday and are moving toward the upper end of recent price ranges.
Overall trade liquidity appears to be fairly light, possibly because of limited activity in March contracts, but Monday's total West Texas Intermediate crude volume was the lowest in more than a month. Contract may not attract much more liquidity until some of the recent highs are broken.
Gains in refined product contracts, particularly RBOB, were outpacing morning advances in crude, widening refiner margins and keeping the March-April spread at more than 25cts/gal. Part of the rally in RBOB was attributed to Russia's decision to ban gasoline exports for six months beginning March 1. The ban, which was reported by Russia's RBC daily, is aimed at keeping domestic prices stable as demand rises.
While the U.S. does not import gasoline from Russia due to sanctions, sources said exports will be reduced by a relatively nominal 100,000 b/d. According to a Reuters report Russia exports about 13% of its gasoline production. The country also has seen some of its refineries attacked by Ukrainian drones.
The NYMEX March and April RBOB contract were up by more than 2cts near midday, with April about 2.5cts higher at $2.5815/gal. The April RBOB contract traded as high as $2.5983 earlier in the day, and has not traded above $2.60 since Feb. 14. March RBOB was 2.25cts higher at $2.3282/gal.
ULSD futures gains were more modest, with the March and April contracts just over 1ct higher. After the diesel crack spread on the screen expanded by about $2/bbl based on Monday's settlements, the contracts were barely keeping pace with crude oil futures on Tuesday. In addition, some unseasonably warm weather in Northeast heating oil markets is helping to keep a lid on ULSD values.
The NYMEX March ULSD contract was 1.13cts higher at $2.774/gal and the April contract was up by just over 1ct to $2.7184/gal.
The NYMEX April WTI contract has struggled to reach $79/bbl despite several runs at that level since it became the prompt-month contract. Each time it has approached that mark, sellers have stepped in, cooling prices.
In Tuesday morning trading, the April WTI contract rose to as high as $78.52/bbl, before pulling back near midday to $78.35/bbl, up about 80cts.
The Brent contract is also chasing the $84 level, but as with WTI, selling has emerged as it approaches that price. The April Brent contract traded Tuesday as high as $83.33/bbl, but was at $83.17/bbl, up 64 cents, near midday.
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 Denton Cinquegrana, dcinquegrana@opisnet.com; Editing by Jeff Barber, jbarber@opisnet.com
(END) Dow Jones Newswires
02-27-24 1246ET
