Crude Oil and Refined Product Futures Show Increase

Crude oil and refined product futures have seen a rise at midday on Friday, although there is still a possibility of week-to-week declines.

Contracts are currently testing the recent resistance levels that emerged as prices weakened throughout the week; they have reached or are near morning highs.

The modest gains observed today can be attributed to short-covering activities before the weekend, and trading volumes appear to be relatively lower.

Notably, this week has witnessed an interesting dynamic in West Texas Intermediate (WTI) contracts, with the backwardation between the December and January contracts fading away.

To provide some context, on November 1st, the NYMEX December WTI contract was priced at 34 cents over January. At present, there is little price disparity between the two. The December WTI contract is valued at $77.21/bbl near midday, having increased by $1.47, while January trades at the same level. Additionally, the January Brent contract rose by approximately $1.50 to reach $81.51/bbl.

In contrast to most of the week, NYMEX ULSD futures are experiencing some buying pressure on Friday. Contributing factors include weather forecasts predicting above-normal temperatures throughout most of the U.S. next week, along with Russia lifting diesel export bans.

The December ULSD contract appears to be striving to establish a bottom, with Thursday seeing lows of $2.696/gal and Friday at $2.698/gal. Prices have rebounded from these lows, with December ULSD currently trading up more than 5 cents at $2.77/gal, just half a cent below the morning high.

Throughout the week, the RBOB contract has maintained its resilience. At midday, both the December and January contracts have risen by approximately 3 cents/gal to $2.1891/gal and $2.1669/gal, respectively.

While cash markets have not experienced significant movement, spot gasoline prices in Group 3 have slightly declined at midday due to weakening differentials to the NYMEX.