ULSD Edges Higher on Supply Watch, Gasoline, Oil Steady


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- ULSD futures edged higher Friday (12/5) morning, 
supported by global supply concerns while gasoline and oil prices steadied on 
expectations of a Federal Reserve rate cut next week.

   NYMEX front-month ULSD futures were up $0.039 to $2.3436 gallon after a 
session high at $2.3469.

   Front-month RBOB futures rose $0.0018 to $1.8290 gallon after rallying to 
$1.8350.

   WTI futures for January delivery dipped $0.09 to $59.58 bbl, while ICE Brent 
for February delivery dipped $0.04 to $63.22 bbl.

   The U.S. Dollar Index was little changed at 98.945 against a basket of 
foreign currencies.

   Traders said ULSD was supported by recent maintenance events at global 
refineries that had limited the worldwide supply of diesel.

   Also lending support, they said, was Russia's disinterest in seeing a quick 
end to the war in Ukraine unless the settlement was on its terms. Russian 
diesel supplies have been crimped by Ukrainian strikes on refineries and by 
U.S. sanctions against Russian energy firms Rosneft and Lukoil, as Washington 
tries to find a solution to the near four-year long Ukraine conflict.

   White House senior adviser Kevin Hassett's remarks to media that it was 
"time for the Fed to cautiously reduce rates" boosted sentiment in crude oil 
and gasoline, which typically move according to economic expectations.

   Markets are expecting the Fed to agree to a third 25-basis point rate cut 
this year at the Wednesday (12/10) meeting of the central bank's policy-making 
Federal Open Market Committee. According to CME's FedWatch tool, only 12% of 
traders expect rates to remain in the 3.75-4% target range.




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