ULSD at 2-Month High, Natural Gas Jumps on Storm Fern


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- ULSD futures hit a two-month high Monday (1/26) and 
natural gas rallied as well after a massive ice storm raised heating demand 
from the Southern Plains to Northeastern U.S.

   Crude and gasoline futures dipped as oil export terminals in Kazakhstan 
resumed full operations from an outage.

   The U.S. dollar hit a four-month low against a basket of currencies, 
limiting the downside for oil and other commodities denominated in the 
greenback.

   Severe arctic conditions are expected to have idled some 250,000 bpd of 
output after the weekend's Winter Storm Fern, analysts at JPMorgan said in a 
note.

   Even so, regional grid operators like PJM Interconnection were bracing for 
all-time winter peak loads exceeding 147 gigawatts this week after the storm 
that impacted over 230 million people.

   ULSD is particularly sensitive to such freezing conditions given the 
dependence on heating oil at this time of year.

   Diesel consumption is also expected to spike from heavier reliance on 
machinery and equipment needed to clear ice and other debris from the storm, 
which dumped as much as a foot of snow in some areas. Delivery trucks and 
heating systems were working overtime, emergency responders said.

   Regional distillate reserves hit extreme lows last week, staying about 14% 
under five-year averages. The drop highlights the vulnerability of local energy 
networks during prolonged winter emergencies.

   In Kazakhstan, full capacity returned to export terminals in the Black Sea 
on Sunday, easing concerns over near-term crude supply.

   NYMEX ULSD futures contract for February delivery strengthened by $0.1177 to 
$2.5462 gallon after a two-month high at $2.5797.

   In crude, WTI futures for March delivery settled down $0.44 at $60.63 bbl, 
while the March ICE Brent futures contract finished down $0.29 at $65.59 bbl.

   Front-month RBOB futures fell by $0.0325 to $1.8369 gallon.

   Natural gas for February delivery on the CME jumped by $1.269 per MMBtu to 
$6.544.

   The U.S. Dollar Index fell by 0.574 points to 96.83, after a four-month low 
at 96.62.

    




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