After a bit of bounciness this morning, West Texas Intermediate crude and Brent futures are decidedly higher while refined product contracts are more mixed.

With March WTI up roughly $1/bbl, the contract is in line for a seventh-straight day of gains. Additionally, both WTI and Brent are making a move toward what could new highs for 2024.

Trade sources are having trouble pinning down what may be behind the rally, as equities are pointing lower with a hotter-than-expected inflation reading for January and a dollar that is breaking sharply higher.

Nevertheless, it appears the overriding trend of higher oil prices has a grip on the market, with March WTI getting above the $78/bbl mark and Brent getting over the $83/bbl mark. Although both contracts are decidedly higher, prices are about $1/bbl lower than the current 2024 highs.

After hitting $78.15/bbl, front-month WTI has pulled back slightly to last trade at $77.90/bbl, a gain of 98cts. April Brent got up to $83.04/bbl, and like WTI is pulling back slightly to $82.80/bbl, a gain of 80cts.

Refined products were moving in opposite directions at around noon ET, with RBOB up several cents and ULSD down nominally.

Front-month RBOB futures are hovering right around the $2.40/gal level, trading at $2.3994/gal, up 3.21cts. The March contract is slightly outperforming April, which is up 2.96cts at $2.6199/gal. The spread between the two contracts has been steady, averaging about 22.5cts/gal since the beginning of February. That spread stood at around 22cts at midday.

Most cash markets are following RBOB futures higher, but the Gulf Coast and Group 3 stand with discounts narrowing versus futures, with prices higher by about 5cts/gal.

After slipping into negative territory within the last hour or so, the ULSD contract is running at levels that are relatively flat.

Like the crude oil rally, market watchers are having a tough time finding a reason to explain ULSD going from up some 4.5cts/gal this morning to just about unchanged. However, natural gas futures have been getting hammered, with the March contract trading below $1.70/mmbtu. Additionally, Europe is expected to see a warming trend, trade sources note, and that could be pulling diesel down due to a softening heating oil/gasoil (HOGO) spread.

At midday, March ULSD was up about a half-cent at $2.9249/gal with the April contract up just over a penny at $2.8486/gal.


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 Steve Cronin, scronin@opisnet.com


(END) Dow Jones Newswires

02-13-24 1237ET