MARKET PREVIEW: Oil Futures Advance on Forties Outage
12/15 7:37 AM
MARKET PREVIEW: Oil Futures Advance on Forties Outage NEW YORK (DTN) -- Spot-month oil futures on the New York Mercantile Exchange extended higher early Friday after the continued outage of the Forties crude oil pipeline in Europe and oil production cuts by the Organization of Petroleum Exporting Countries offset higher oil output in the United States. The 445,000 bpd Forties pipeline was shut after a crack was found in Aberdeen, Scotland, early this week, and its operator Ineos said it could be several weeks before the line is back in service. Forties contributes 40% of the four crude streams feeding North Sea Brent crude, a benchmark that sets prices of other international crudes. This comes after the Energy Information Administration reported midweek that U.S. crude oil stocks were drawn down by 5.1 million bbl during the week-ended Dec. 8, which further boosted West Texas Intermediate crude. On Wednesday, OPEC's Monthly Oil Market Report showed total OPEC crude production averaged 32.45 million bpd in November, down 133,000 bpd over the previous month and the lowest in six months. OPEC and 10 non-OPEC producers last month agreed to continue with their output cuts of 1.8 million bpd through December 2018. On Thursday, the International Energy Agency kept its global oil demand outlook unchanged but raised its forecast for oil production by non-OPEC, led by U.S. oil production. In its Oil Market Report for December, the Paris-based IEA said it expects non-OPEC supply growth at 600,000 bpd to 58.1 million bpd in 2017 while also revising higher its 2018 projection by 200,000 bpd for a 1.6 million bpd year-on-year growth rate to 59.7 million bpd. IEA raised its forecast for U.S. output growth to 870,000 bpd for 2018, up from last month's forecast for an increase of 790,000 bpd. IEA sees a global oil surplus of 200,000 bpd during the first half of 2018 turning to a deficit during the second half, which means the market is going to be closely balance by late next year. This afternoon, the market will get Baker Hughes' weekly U.S. rig-count report. It comes days after EIA reported U.S. crude production increased 73,000 bpd to a 9.78 million bbl fresh 46-year high during the week-ended Dec. 8 while 984,000 higher on the year. Futures at 8:00 AM ET NYMEX Contract Last Change High Low WTI Jan. $57.24 $0.20 $57.47 $57.06 WTI Feb. $57.40 $0.18 $57.49 $57.10 ULSD Jan. $1.9143 $0.0044 $1.9208 $1.9075 ULSD Feb. $1.9207 $0.0035 $1.9229 $1.9100 RBOB Jan. $1.6819 $0.0069 $1.6873 $1.6726 RBOB Feb. $1.6983 $0.0072 $1.7032 $1.6898 ICE Brent Feb. $63.30 -$0.01 $63.68 $63.19 Brent Mar. $62.68 $0.02 $63.05 $62.61 SPOT PRODUCT MARKETS East of the Rockies spot oil product prices trekked higher on Thursday fueled by an upside reversal in oil futures, and moved mixed on the West Coast where gasoline basis in Los Angeles and San Francisco tumbled on building PADD 5 gasoline supply. Regular CARBOB in LA and the Bay fell to 18cts futures discounts that dropped spot prices by 6.60cts and 5.60cts, respectively. Suboctane regular in Portland edged 0.40cts higher limited by a 200pts basis pullback. CBOB prices in the Midwest moved marginally above the 2.4cts advance in January RBOB futures. RBOB at the Gulf Coast climbed 3.15cts and matched the futures bounce in the Harbor. Basis gains in West Coast diesel fuel prices added to the 0.55cts advance in futures. CARB ULSD basis in the bay improved 200pts and by a penny in the basin. Portland ULSD jumped 125pts in cash differential and 2.05cts in spot price. Group 3 ULSD climbed 1.80cts on a 125pts basis gain and a penny basis boost lifted Chicago diesel by 1.55cts gallon. Gulf Coast spot ULSD price posted an 0.80cts advance and edged 0.70cts higher in the Harbor offered 0.5cts below January futures. NEW YORK HARBOR GULF COAST Heating Oil $1.8318 Heating Oil $1.7168 ULS Heating Oil $1.8343 ULS Heating Oil $1.7508 ULSD $1.9068 ULSD $1.8333 Jet, 54-grade $1.9068 Jet, 54-grade $1.7778 Conventional Regular $1.7119 Conventional Regular $1.6474 RBOB $1.6784 Conventional Premium $1.7194 PBOB $1.7669 RBOB $1.6144 CBOB Regular $1.6819 PBOB $1.7469 CBOB Premium $1.7719 CBOB Regular $1.6144 CBOB Premium $1.7204 GROUP 3 ULSD $1.8418 CHICAGO Jet $1.8643 ULSD $1.8793 Suboctane Gasoline $1.6019 Jet $1.8443 Conventional Premium $1.7319 CBOB Regular $1.6019 Conventional Premium $1.8019 LOS ANGELES RBOB $1.6269 ULSD $1.8493 PBOB $1.8769 CARB ULSD $1.8743 Jet $1.7943 Conventional Regular $1.5019 PORTLAND Conventional Premium $1.7469 ULSD $1.9118 CARBOB Regular $1.5019 Jet $1.8043 CARBOB Premium $1.7469 Suboctane Gasoline $1.7019 Conventional Premium $2.0469 SAN FRANCISCO ULSD $1.8768 CARB ULSD $1.8768 Jet $1.7943 Conventional Regular $1.4569 Conventional Premium $1.7619 CARBOB Regular $1.5019 CARBOB Premium $1.7619 George Orwel, 1.718.522.3969, george.orwel@dtn.com, www.dtn.com. (c) 2017 DTN. All rights reserved.