Crude oil and refined product futures saw significant fluctuations on Wednesday morning as a result of ongoing disagreements within OPEC+ and unexpected supply and demand data from the Energy Information Administration (EIA).
OPEC Uncertainty Impacts Prices
During the morning session, West Texas Intermediate (WTI) crude futures were trading between $75.67/bbl and $77.88/bbl, largely influenced by fresh OPEC headlines.
Anticipation of the upcoming OPEC meeting on Thursday led to a spike in prices as speculators speculated that the cartel may extend or increase their current output cuts.
However, news of discord between Saudi Arabia and several African OPEC members resulted in a selloff later in the morning, although prices recovered partially.
At midday, the NYMEX January WTI contract rose by 87 cents to reach $77.28/bbl, while Brent crude increased by 73 cents to $82.41/bbl.
Mixed Data From EIA
The EIA’s latest data presented a mixed picture. While there was a modest stock build of 1.6 million barrels in the week ending Friday, this was offset by a notable 515,000 b/d increase in U.S. refinery input.
Market sources suggest that the build-up of crude stocks during autumn may not continue unless the discord within OPEC+ is resolved.
Fluctuations in Refined Products Futures
Refined products futures also experienced volatility throughout the morning, with mixed results observed at midday.
According to the EIA, distillate inventories saw an increase of 5.2 million barrels last week due to a significant drop in demand of 3.014 million b/d.
In conclusion, ongoing disagreements within OPEC+ along with unexpected US supply and demand data have contributed to the unstable nature of crude oil and refined product futures in the market. Investors are eagerly awaiting the outcome of the upcoming OPEC meeting to gain further clarity on the future direction of these commodities.
Energy Market Update
ULSD Futures Fall Amidst Outlier Numbers
ULSD futures experienced an unexpected drop of 8 to 9cts/gal, although this may be considered an outlier. Buyers, however, stepped in to stabilize the market. The NYMEX January ULSD contract, as a result, decreased by 4.55cts to $2.8615/gal at midday.
Gasoline Futures Show Modest Increase
During the morning session, gasoline futures traded within a range of 6.5cts. By midday, they registered a modest increase. The EIA reported a 1.8 million bbl rise in gasoline stocks last week, primarily due to weak demand figures of 8.2 million b/d. Additionally, the agency observed a rise in refinery run rates, suggesting an increase in gasoline production in the upcoming weeks and months.
The NYMEX December RBOB contract experienced a rise of 1.27cts to $2.2427/gal.
Mixed Spot Prices Across the U.S.
Spot prices across the United States showed variation. New York, Houston, Chicago, and the Gulf Coast experienced fractional gains, while Group 3 saw a slight decline.
Continued Decrease in U.S. Retail Gasoline Prices
U.S. retail gasoline prices fell slightly on Wednesday, marking 62 consecutive days of lower prices. Nevertheless, Tuesday’s strong gains in RBOB futures indicate that this streak may come to an end on Thursday.