NYMEX Overview: Wild Day Envelops Petroleum Markets; Oil Plunges, RINs Soar — OPIS

Very active trading has been witnessed so far Thursday in global oil markets, but also in trade for Renewable Identification Numbers. In the case of oil, some very sharp declines marked the morning while with RINs, prices advanced by more than 10%.

Some observers believe the factor driving oil prices down is based on a specious report. The Financial Times ran a story this morning that indicated the Saudis would put more oil on the market later this year and abandon their quest to see prices advance toward the century mark. Numerous trading counterparties and analysts have attempted to debunk the story but petroleum futures were still moderately lower at midday.

Volumes were brisk in the oil benchmarks. Brent got as low as $70.72/bbl at one point, and WTI scraped a low trade at $66.95/bbl during the height of the selling spree. Elliott Wave analysts note that these benchmarks might see stop-loss selling should Brent and WTI go below $70.07/bbl and $66.82/bbl respectively.

Beyond the disputed Financial Times story there is some new bearishness attached to reports that fighting Libyan factions may soon settle a dispute that has kept another 500,000 b/d of crude off global markets.

At midday, November Brent fought back to where prices were down $1.51 at $71.95/bbl. November WTI was off $1.25 at $68.44/bbl.

Refined product values did not match the losses in crude, but it was not necessarily a constructive morning for refiners. Motivated by a wider bean oil/heating oil spread, RINs values soared to where 75cts was consummated for both D4 and D6 RINs. That widened the cost of complying with the RVO to about $4.67/bbl at press time.

RBOB futures descended in the morning to $1.9877/gal reflecting a 1.22cts drop on the day. Physical markets did not move in lockstep and indeed Chicago area spot gasoline prices were up nearly 15cts. Unconfirmed reports were that the CITGO Lemont, Ill. refinery had flaring. With work going on at BP Whiting and Marathon Detroit, there isn't much tolerance for output issues in the region.

Diesel prices traded for as little as $2.098/gal as selling interest crested but October ULSD was off just 1.27cts at $2.1475/gal closer to midday. Physical prices in Chicago were an outlier, posting a gain of 1.75-2cts, while most other regions followed the NYMEX lower.

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 Andrew Atwal,   aatwal@opisnet.com 
 

(END) Dow Jones Newswires

September 26, 2024 13:01 ET (17:01 GMT)

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