In a volatile morning session, both crude oil and refined product futures saw wide-ranging fluctuations on Wednesday. The market responded to the persistent discord within OPEC+ and unexpected U.S. supply and demand data from the Energy Information Administration (EIA).
West Texas Intermediate (WTI) crude futures exhibited a trading range of $75.67/bbl to $77.88/bbl in the morning session, driven by evolving OPEC headlines. Speculation that the cartel might extend or increase current output cuts for Thursday’s meeting pushed prices to a morning high. However, reports of disagreements between Saudi Arabia and several African OPEC members triggered a mid-morning selloff, only to recover partially later.
At midday, the NYMEX January WTI contract showed an increase of 87 cents, reaching $77.28/bbl, while Brent crude rose by 73 cents to $82.41/bbl.
The EIA’s crude data presented a mixed picture, revealing a modest 1.6-million-bbl stock build in the week ended Friday, offset by a 515,000 b/d increase in U.S. refinery input. Some industry insiders anticipate that autumn builds in crude stocks could give way to lighter inventory if OPEC+ tensions persist.
Refined products futures displayed mixed trends at midday following a broad morning trading range. The EIA reported a significant 5.2 million bbl rise in distillate inventories last week, attributed to a 3.014 million b/d drop in demand. Despite being considered somewhat of an outlier, this led ultra-low sulfur diesel (ULSD) futures to decline by 8 to 9 cents/gal. Buyer activity subsequently tempered losses, leaving the NYMEX January ULSD contract down by 4.55 cents at $2.8615/gal at midday.
Gasoline futures experienced a 6.5-cent range during the morning session, with a modest increase near midday. EIA estimates suggested a 1.8 million bbl rise in gasoline stocks last week, mainly influenced by a weak demand reading of 8.2 million b/d. The agency also noted an uptick in refinery run rates, indicating potential increased gasoline production in the coming weeks and months. The NYMEX December RBOB contract was up by 1.27 cents, reaching $2.2427/gal.
U.S. spot prices exhibited variation, with fractional gains in New York, Houston, Chicago, and the Gulf Coast, alongside a minor decline in Group 3. Despite a fractional decrease in average U.S. retail gasoline prices on Wednesday, marking the 62nd consecutive day of lower prices, the streak may end on Thursday, influenced by Tuesday’s strong gains in RBOB futures.