Petroleum futures were higher Wednesday morning with some deadlines looming that might inspire buyers or sellers shortly.
When markets close Wednesday, there will be just eight sessions left until March 4, the date when tariffs on Canada and Mexico are scheduled to take effect. Similarly, there are only 28 business days remaining until April 1, when OPEC is scheduled to begin restoring some of the crude oil production cuts rendered in 2023 and 2024.
Crude oil benchmarks were stronger, although Brent and West Texas Intermediate have backed off from $1/bbl or so gains in the early morning. The conventional wisdom holds that OPEC+ will postpone its restoration of crude oil barrels for another quarter or more, and there is little talk about whether tariffs on Canada are forthcoming in April. Ahead of midday, March WTI was up 81cts at $72.66/bbl while April Brent held on to 66ct gains which put it at $76.50/bbl.
Tuesday's damage to the Caspian Pipeline isn't having much impact, but most assessments of the first 50 days of 2025 yield estimates that suggest demand is slightly outstripping supply.
The wildest market Wednesday i s natural gas, where there is a $4/MMBtu or greater handle for all futures contracts on the board. Most of the gains are tied to colder-than-normal temperatures in the nation's midsection. The robust natural gas numbers aren't creating much collateral lift in ULSD futures, but there are gains in near-term contracts of 1.75-2.5cts/gal. The March ULSD contract was up 1.79cts at $2.4585/gal with about 5cts/gal in backwardation into the April time slot.
Most spot prices for diesel are higher, but a major exception is seen in Group 3 where diesel is down about 8cts/gal this morning.
Gasoline is lackluster but OPIS' volume survey for last week is suggestive of perhaps the strongest consumer demand so far in 2025. That is not necessarily a high bar, and data sets hint that we may see an implied demand measurement Thursday just north of 8.5 million b/d. Inclement weather in much of the country is inhibiting demand in some areas this week, so any demand surge for the week ending Friday may be fleeting.
March RBOB was up a measly 0.48ct to $2.0915/gal. If there is any speculative interest in gasoline it would show up in April when the spec changes to summer requirements. That contract is now at $2.3295/gal, reflecting an increase of 0.73ct on the day and implying wholesale month-to-month rises of about 24cts.
Cash markets are on the flat side. Los Angeles gasoline caught a bid and rose about 3.5cts/gal this morning, but most spot venues find price increases of just 0.5-1.5cts/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 Tom Kloza, tkloza@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com
(END) Dow Jones Newswires
02-19-25 1245ET
