NYMEX May crude futures settled $1 higher at $108.11/barrel Thursday, with spread action the main focus of the oil complex as NYMEX WTI narrowed its discount to ICE Brent futures.
On ICE, May Brent futures were 52 cents lower at $122.36/b by the close of NYMEX open outcry.
The May WTI/Brent spread, at minus $14.28/b by the close of NYMEX open outcry, narrowed from minus $15.77/b on Wednesday. For June, the spread moved to minus $13.20/b, from a previous settle of minus $14.62/b.
Olivier Jakob, analyst at Petromatrix, said after widening for the last 10 days, the spread was hit by profit-taking on Thursday.
"Since the start of the year the spread has been creating a floor and we have come to a value area where we typically see profit-taking," said Jakob.
While the spread has been the focus of Thursday's session, Jakob noted that demand destruction has moved into the spotlight after Goldman Sachs on Monday made a call to close out its CCCP basket trade, consisting of crude oil, copper,cotton/soybeans and platinum.
The move sparked a strong selloff in the oil complex that led to a drop of more than $8/b in the NYMEX front-month crude contract over the previous three days.
On Monday, front-month crude hit a fresh 2-1/2 year high of $113.46/b then quickly backed off, losing more than $3.50/b from the high to settle at $109.92/b. By Wednesday, with an already large net long presence in the market by non-commercials, front-month crude dipped to a session low of $105.31/b.
Despite front-month crude's subsequent gains, the upside appears limited.
"The talk of demand destruction has put a cap on prices," Jakob said. "It is not a usual stance of Goldman Sachs to turn bearish on oil and that made for a lot of talk in the market."
However, a large draw in US gasoline stocks of 7 million barrels, reported by the US Energy Information Administration Wednesday, dimmed some of the light on the Goldman spotlight.
"The strong product draws are, in a big part, linked to production problems at refineries rather than the result of a surge of consumer demand, but a stock draw remains a stock draw and will need to be compensated by higher production in weeks to come if a drop of days-of-cover wants to be avoided," Jakob said.
In products, NYMEX May heating oil settled 1.38 cents lower at $3.1890/gal and May RBOB settled 77 points lower at $3.2347/gal.
RBOB futures spiked in early morning trade from news of a small fire at Sunoco's 330,000 b/d Philadelphia refinery complex (See story, 1352 GMT), but futures quickly turned lower once investors assessed the fire as a non-event.
(Source: http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6998924)
Posts
0 comments