Petroleum futures gave back early Tuesday gains and were down across the board at midday.

The morning gains appeared tenuous and a dip below Monday's lows led to another wave of selling.

NYMEX data showed that while Monday volumes rose to a two-week high, total liquidity fell short of the 1-million-contract mark. Open interest, however, reached a three-week high, a development that often signals fresh short selling.

"Crude oil stocks built last week, so more commercial shorts are needed and I think specs and producers jumped in (on the short side) once $70 broke," Elaine Levin, president of Powerhouse brokerage, said.

Crude oil contracts held onto gains for most of the morning, but couldn't hold the line. The NYMEX December West Texas Intermediate contract fell to a morning bottom of $66.72/bbl before rebounding to $67/bbl, down 38cts.

Brent crude followed the same pattern, dropping as low as $70.72/bbl before regaining some ground. The December contract was off at midday by 44cts to $70.98/bbl.

Refined products also were trading down, with gasoline contracts leading the way lower. The NYMEX November RBOB contract, which will expire later this week, was off by about 2cts to $1.9455/gal, while the more liquid December contract was 1.37cts lower at $1.912/gal, about 1ct above the recent low.

Most cash gasoline prices were lower at midday, with Gulf Coast prompt CBOB valued at about $1.79/gal, or $75.18/bbl. That may look like an acceptable crack spread against WTI futures, but after including the cost of Renewable Fuel Standard compliance and operating and crude delivery costs, it is likely refiners are producing gasoline at a loss.

Diesel futures were also lower, but the declines were smaller than those for gasoline. The NYMEX November ULSD contract fell as low as $2.1062 before rising to $2.1205/gal, off 0.81ct. The December contract was down by a similar amount to $2.1316/gal and prices in most cash markets were off by less than 1ct to nearly 2cts.


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

10-29-24 1256ET