WTI at $58 as Putin Raises Tensions, ULSD Tumbles


   
Barani Krishnan
DTN Refined Fuels Market Reporter

    

   ULSD Futures Rebounds on Russia's Push on Ukraine War

   VIENNA (DTN) -- The NYMEX ULSD futures contract for January delivery 
reversed early losses to settle up Thursday (12/4) as crude prices were boosted 
by Russia's demands for a change in a U.S. peace plan for Ukraine. Market 
participants expect limited supplies as this move could keep sanctions intact 
for now on Russian oil.

   Additionally, concerns of an imminent attack on Venezuela by the U.S. army 
also boosted the geopolitical premium that had been slacking in oil for months. 

   U.S. President Donald Trump revived on Wednesday (12/3) a threat to launch 
land strikes "very soon" on alleged Venezuelan drug cartels. According to the 
Organization of the Petroleum Exporting Countries, of which Venezuela is a 
member, the Latin American country holds approximately 300 billion bbl in oil 
reserves--among the largest in the world. OPEC data also indicates that 
Venezuela's oil production reached nearly 1.1 million bpd in October.

   ULSD rebounded while gasoline and crude futures extended their run-up from 
Thursday morning amid media reports that Ukrainian negotiators will join a new 
round of talks in Florida as Russian President Vladimir Putin said some of the 
points in a U.S.-backed peace plan for Ukraine were unacceptable to him.

   "This is yet another sign of how far we are from the deal that the market 
has been banking on for weeks," John Kilduff, partner at New York energy hedge 
fund, told DTN.

   Putin, on a state visit to New Delhi, also defended India's right to buy oil 
from his country amid sanctions against Moscow-based energy firms Rosneft and 
Lukoil that have stranded at sea millions of barrels intended for Indian and 
Chinese refineries.

   A rally in the U.S. dollar, however, limited the advance in fuel and crude 
oil prices towards Thursday's close.

   NYMEX ULSD futures for January delivery settled up $0.028 at $2.3037 gallon 
after sliding to $2.2693 earlier.

   Front-month RBOB futures closed flat at $1.8271 gallon after rallying to 
$1.8386 earlier.

   WTI futures for January delivery finished the session up $0.77 bbl at $59.67 
bbl, while ICE Brent for February delivery advanced $0.56  to $63.23 bbl.

   The U.S. Dollar Index rebounded by up 0.164 points to 98.96 against a basket 
of foreign currencies.

    




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