Nymex Overview: Futures Buck Autumn Ebb Tide Pull Thanks to Chinese Stimulus — OPIS

Global oil prices rallied Tuesday morning, sparked perhaps by the announcement of Chinese stimulus measures.

Still, there is such a strong tendency for ebb tides in crude oil and gasoline benchmarks in autumn that Tuesday's rally has been tentative at best.

The Brent contract was up $1.20 at $75.10/bbl at midday following a Monday report from Goldman Sachs forecasting a likely surge to $77/bbl by year's end.

Similarly, West Texas Intermediate moved up $1.15/bbl to $71.52/bbl. Open interest figures published Tuesday morning showed an increase of over 10,000 contracts in Monday's session and that could demonstrate that large entities are still willing to short the crude oil complex.

The major hindrance for crude prices this autumn comes via product values. The "big three" transportation fuels (gasoline, diesel and jet fuel) fetch current per-barrel prices of $81.85, $88.75 and $85.39, which works out to very narrow cracks across the barrel. Those same three products fetched numbers of $104.45/bbl, $135.44/bbl and $128.09/bbl one year ago when WTI settled above $90/bbl.

There was little risk in buying crude with such hefty margins one year ago, but there is plenty of risk in crude procurement with current fuel numbers.

RBOB futures rallied this morning with the October futures price up 4.49cts/gal at $2.0351/gal. Physical markets generally followed with 3.5-5cts/gal increases, but trading in spot gasoline was subdued.

Diesel has more or less matched the crude oil increases. October ULSD futures were ahead 3.8cts/gal at $2.1831/gal with spot prices up 3.5-5.75cts/gal.

Beyond fossil fuels, this has been a shaky week so far for ethanol values. They have plunged below $1.60/gal, which in some cases puts the cost of alcohol more than 50cts/gal cheaper than hydrocarbons.

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

September 24, 2024 12:57 ET (16:57 GMT)

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