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Market Intel Archives

Oil futures hit one month high on expectations that US crude oil inventories decreased

April 05, 2017
Recap: Oil futures reached a one month high on expectations that U.S. crude oil inventories fell as refinery operations increased.  For the first time since March 8th, spot WTI traded and settled above $51 a barrel. May futures tacked on 79 cents, or 1.57%, to settle at $51.03 a barrel. June Brent ended the session at $54.17 a barrel, up $1.05, or 2%.

With WTI posting an outside trading session by the achievement of a lower low, higher high and higher settlement than that of the previous session and, supported by bullish moving oscillators, the momentum of this market has shifted to the upside. Near term support rests at $51.40 and above that at $52.16, the 50-day moving average for the May contract. Support is set at $50.85 and below that at $50.26.

May RBOB rose 1.7%, to $1.7217 a gallon, its highest finish since August 2015, while May heating oil rose 2.89 cents, or 1.9%, to settle at $1.5923 a gallon.

Fundamental News:  According to Bloomberg, crude stocks at Cushing, Oklahoma increased by 300,000 bpd to 68 million barrels in the week ending March 31st.

Reuters reported Tuesday morning that production at the Buzzard oil field in the North Sea was halted for technical repairs.  Normal output should be restored in the coming day or two.  The Buzzard field normally produces 180,000 bpd.

OPEC's progress in reducing the oversupply in global oil markets was aided by cuts in production from Nigeria and Libya in March, two countries that are exempt from OPEC's output cut agreement.  OPEC produced 32.095 million bpd, down 200,000 bpd from February.  Supply from Nigeria and Libya fell by a combined 210,000 bpd to 1.55 million and 620,000 bpd, respectively.  Among the 10 members bound by production caps, compliance weakened to 89% of pledged reductions from 104%.  Saudi Arabia's production totaled 10.01 million bpd in March, increasing its proportion of OPEC output up to 32.13% from 31.4% in February.

Libya's National Oil Corp said production at Libya's Sharara oil field has increased back to 200,000 bpd, nearing the rate it was running at before a recent week-long shutdown.  The NOC said it hopes to increase output from the field to 270,000 bpd in the coming weeks.

In a research note to clients this week, BNP Paribas modestly raised their crude oil price forecast for WTI in 2017 by a dollar to $57.00 a barrel. They also increased their Brent price outlook by $2.00 a barrel to $60.00 per barrel. The bank's analysts left unchanged their price call for 2018 with WTI averaging $61.00 per barrel and Brent posting an average price of $63.00 per barrel.

Colonial Pipeline announced it is allocating space for Cycle 21 shipments on Line 1, its main gasoline line.

Genscape observed what appeared to be power consumption at the Story, Iowa pumping station on Energy Transfer Partners' 470,000 bpd Dakota Access Pipeline starting on March 26th.  The increased power consumption likely indicates that oil has started flowing through the pipeline.  Dakota Access is currently commissioning the pipeline and is preparing to place it into full service.

About 1 million tons of diesel are expected to arrive in Europe in April from the US Gulf Coast.

According to IHS, crude and refined product shipments from the US Gulf fell to 3.1 million metric tons on 75 ships in the week ending March 30th.  It is down 27% from the previous week's 4.26 million metric tons on 104 ships. 


Early Market Call - as of 9:00 AM EDT
WTI - May $51.70, up 67 cents
RBOB - May $1.7317, up 97 points

Oil prices fell after lifting of force majeure at Libya's Sharara oil field

April 04, 2017

Recap: Oil futures edged higher in overnight trading on economically promising data out of Asia, only to succumb to pressure from the lifting of force majeure at Libya's Sharara oil field. May WTI fell 48 cents, to a low of $50.12 before recouping some of its losses. WTI traded in a narrow range of 71 cents, under a lightly traded market. This spot contract settled at $50.24, down 36 cents, or 0.71%. Brent for June delivery slipped 50 cents, or 0.52%, prior to a settlement of $5312 a barrel.

May RBOB fell 0.93 cent, or 0.6%, to close at $1.6937 a gallon and May heating oil slipped 1.12 cents, or 0.7%, to $1.5634 a gallon.

Fundamental NewsGenscape reported that crude oil stocks held in Cushing, Oklahoma in the week ending March 31st increased by 762,430 barrels from Friday, March 24th and by 430,725 barrels from Tuesday, March 28th to 71,331,030 barrels.

OPEC Secretary General, Mohammed Barkindo, said crude stocks are starting to decline in a sign that the production cuts implemented this year are bringing the market to balance.  Separately, he stated that Iraq assured OPEC it will fully comply with an agreement to cut oil production in order to increase crude prices.  Iraq's Oil Minister, Jabar al-Luaibi, said the country's compliance stands at 98%.  He said he was satisfied with the existing deal, but declined to say whether Iraq would support an extension.  Iraq's Oil Minister also said the country's exports from southern ports in April are expected to total 3.2 million bpd, unchanged on the month.  

Iran's Oil Ministry reported that the country's combined exports of crude oil and gas condensate reached a record 3.05 million bpd by March 20th, the end of the Iranian month of Esfand.  Its crude oil exports totaled 2.265 million bpd and its gas condensate exports totaled 785,000 bpd.  

Colonial Pipeline is allocating Cycle 21 shipments on Line 2, its main distillate line from Houston, Texas to Greensboro, North Carolina.

Nigerian oil tanker drivers will go on strike starting April 3rd over low wages and poor roads.  A regional chairman for NUPENG, Cogent Ojobo, said the oil tanker drivers from Nigeria Union of Petroleum and Natural Gas Workers have not set an end date for their strike.

According to Bloomberg, total US waterborne LPG exports from Houston, Port Arthur, Philadelphia and Seattle fell by 25% to 900,161 bpd in the week ending March 30th.  It is down from 1.2 million bpd the previous week.

The Syncrude oil sands project in northern Alberta has cut its production to zero for all of April following a fire last month.

Libya's crude production increased to about 660,000 bpd as its Sharara oil field resumed production on Sunday after a week-long disruption.  Libya's National Oil Corp lifted the force majeure on loadings of Sharara crude from the Zawiya terminal on Monday.  The field was producing about 120,000 bpd on Monday and about 220,000 bpd prior to the March 27th shutdown.  

Goldman Sachs reported that US crude oil output may increase by 60,000 bpd on the year on average in 2017.

Russia's oil output was 11.05 million bpd in March, down 200,000 bpd from October. 


Early Market Call - as of 9:00 AM EDT

WTI - May $50.51 up 27 cents

RBOB - May $1.7044 up 1.07 cents

HO - May $1.5779 up 1.45 cents


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Brent prices moved lower on last trading day for May Brent

April 03, 2017

Recap: Oil futures traded in a disconnected fashion on Friday, as WTI moved higher and Brent moved lower on the last trading day for May Brent. Capping WTI's higher move, was another rise in the U.S. rig count, which increased by 10 to 662. The May contract settled at $50.60 a barrel, up 25 cents or 0.50%, while Brent for May delivery went off the board trading at $52.83 a barrel, down 13 cents or 0.25%. For the quarter, prices lost 5.8%, based upon the most active contract's settlement on Dec.3.

April RBOB rose 1.9 cent, or 1.1%, to $1.700 a gallon, ending more than 2% higher for the quarter, based on the front months. April heating oil rose 1.5 cents, or 1%, to $1.574 a gallon-for a quarterly loss of around 7.6%.

Fundamental NewsBaker Hughes reported that US drillers added oil rigs for the 11th consecutive week.  The oil rig count was increased by 10 to 662 rigs in the latest week.

Oil Movements reported that OPEC's oil shipments are expected to fall by 80,000 bpd to 23.99 million bpd in the four weeks ending April 15th, compared with the same period ending March 18th.

Venezuela's President, Nicolas Maduro, said the country supports extending OPEC's production cuts.  He stated after meeting with Saudi Arabia's ambassador, Jamal Ibrahim Nasef, that there is a historic alliance with Saudi Arabia for oil price stability in the energy world.

The Nigerian subsidiary of Royal Dutch Shell Plc shut down the Nembe Creek Trunk Line, which exports Bonny Light crude, in order to remove theft points.

Marathon expects to restart its 1.2 million bpd Capline pipeline by April 1st following the completion of repairs.

India's Essar Oil more than doubled its oil imports from Iran in February compared with the previous month.  Essar shipped about 246,600 bpd of oil from Iran in February, compared with about 118,000 bpd a year ago.

China's largest crude importer, Sinopec, aims to ship more cargoes from Brazil, the US, and Canada to help ensure stable crude supplies as the Middle East increases refining capacity and Africa suffers disruptions.  Shipments from the Americas reached a record high in March, increasing the region's share of the Chinese market by 1.1% in the first quarter to close to 14%.  China's crude imports from the Americas, led by Brazil, Venezuela and Colombia, reached 5.61 million tons or 1.3 million bpd in March.  China is on track to overtake the US as the world's largest oil consumer this year.

Oil production in West Texas is expected to surpass pipeline capacity.  According to an oil analyst with Bloomberg Intelligence, Permian crude output is expected to increase to 2.65 million bpd in December.  In comparison, takeaway capacity in the region is expected to reach 2.54 million bpd by the end of the year.  Pipeline operators are seeking to increase capacity on existing lines to meet the increased output.  Enterprise Products Partners is expected to start up a new Midland to Sealy, Texas pipeline in the fourth quarter.  However, its full capacity of 450,000 bpd is not expected to be available until early 2018.

IIR reported that US oil refiners are expected to shut in about 984,000 bpd of capacity in the week ending March 31st, increasing available refining capacity by 390,000 bpd from the previous week.  IIR expects offline capacity to fall to 496,000 bpd in the week ending April 7th and 641,000 bpd the following week. 


Early Market Call - as of 9:00 AM EDT

WTI - May $50.76, up 16 cents

RBOB - Apr $1.7139, up 1.05 cents

HO - Apr $1.5850, up 1.05 cents 


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Oil prices moved higher for third straight day and hit highest level in three weeks

March 31, 2017

Recap: Oil futures continued to move higher on Thursday, after the Kuwaiti oil minister stated that his country was in support of extending the current agreement to cut output. Thursday's higher move marked the third straight day of higher prices, and the highest level oil reached in 3 weeks. May WTI topped the session at $50.47 before slightly paring gains. This spot contract settled at $50.35, up 84 cents or 1.70%. May Brent, which expires tomorrow, tacked on 54 cents, or 1.03%, to settle at $52.96.

The front month spread for WTI narrowed to its tightest level in over a month, gaining on inventory drawdowns, pipeline outages, and seasonal maintenance. The May/June spread narrowed to as much as negative 40 cents a barrel.    

April gasoline finished up by almost a penny, or 0.6%, to $1.681 a gallon, while April heating oil gained 1.6 cents, or 1%, to $1.558 a gallon. The April contracts expire at the end of Friday's session.

Fundamental NewsGenscape reported that crude oil stocks held in Cushing, Oklahoma in the week ending March 28th increased by 670,519 barrels on the week and by 331,705 barrels from Friday, March 24th to 70,900,305 barrels.

The IEA's Executive Director, Fatih Birol, said the agency does not expect a major increase in global oil prices despite efforts by OPEC and non-OPEC members to reduce output.  

Kuwait's Oil Minister, Essam al-Marzouq, said his country is among other countries supporting an extension of the OPEC and non-OPEC production cut agreement.

A Reuters survey showed that OPEC oil output fell for a third consecutive month in March and members have now complied with 95% of their commitments under the deal.

Russia's Energy Minister, Alexander Novak, said that Russia cut its oil production by 200,000 bpd in March in accordance with the agreement with OPEC and non-OPEC states.

According to Eurasia Group, it is highly unlikely that Russia will achieve an absolute 300,000 bpd reduction during the tenure of the current agreement.

According to cargo-tracking company, Kpler, OPEC's oil exports fell further this month as several countries not bound by the group's output cut agreement cut shipments.  Iran led the declines with a decline in exports of 416,000 bpd to 2.185 million bpd.  Total OPEC exports in March fell by 1.18 million bpd from the previous month to 24.4 million bpd.  

Iraq's SOMO said the country's oil production averaged 4.464 million bpd so far in March, down 300,000 bpd on levels before OPEC cuts were implemented from January 1st.  Crude exports averaged 3.756 million bpd so far in March, down from 3.869 million bpd in February.

Libya's oil production is expected to fall to about 500,000 bpd due to the shutdown of pipelines from its largest field.

About 1 million tons of diesel are expected to be imported in April from the US Gulf Coast to Europe and the Mediterranean as US refineries return from maintenance.

Gasoline stocks at independently held storage in the Amsterdam-Rotterdam-Antwerp terminal in the week ending March 30th increased by 10.35% on the week but fell by 14.1% on the year to 981,000 tons.  Gasoil stocks increased by 8.27% on the week but fell by 6.73% on the year to 3.286 million tons while fuel oil stocks increased by 3.14% on the week and by 42.53% on the year to 1.545 million tons. 


Early Market Call - as of 9:00 AM EDT

WTI - May $50.27, down 8 cents

RBOB - Apr $1.6824, up 12 points

HO - Apr $1.5611, up 22 points 


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Continued supply disruptions in Libya pushed oil futures to highest level in two weeks

March 30, 2017

RecapOil futures rose to their highest level in almost two weeks, supported by a smaller than expected build in U.S. crude oil inventories, continued supply disruptions in Libya and a strong possibility that the agreed upon output cuts by OPEC and several non-OPEC members would be extended. May WTI settled at $49.51 a barrel, up $1.14, or 2.36%, its highest settlement since March 16. Brent for May delivery tacked on $1.09, or 2.12%, to settle at $52.42 a barrel.

From a technical perspective, May WTI broke and settled through the 10 and 200-day moving averages. These two averages have been playing key roles in this market and the breaking above them puts additional up moves on the chart. The near term objective is $50.11 and through this level, $50.84. Should WTI break above $50.84, there is a good possibility that we could see moves toward the $53 area.  The aforementioned moving averages now provide levels of support for this market. These levels are $48.72, the 200-day average and $48.39, the 10 day average.

April RBOB gained 3.7 cents, or 2.3%, to $1.672 a gallon, while April heating oil rose 2.6 cents, or 1.7%, to $1.543 a gallon.

Fundamental News:  Marathon Petroleum reported Wednesday afternoon it had shut its 1.2 million b/d Capline pipeline on Tuesday as a precaution, after discovering what it called an anomaly on the line in Louisiana. While repairs were underway, no restart date was given. The line moves crude oil from St. James, Louisiana to Patoka, Illinois.

A Reuters survey estimates OPEC oil output is likely to fall for a third straight month in March as the UAE made progress in reducing its output levels coupled with maintenance work and political unrest which cut supplies from Nigeria and Libya. The Reuters survey estimated OPEC compliance at 95%, up 1% from February levels. The Reuters survey also estimated Saudi output rose slightly in March from a large reduction recorded in February. Even with the slight bump in production levels in March, Saudi production cut in March would be 564,000 b/d, well above its pledged cut of 486,000 b/d.

Genscape reported that crude oil inventories in the ARA region fell by 3.2 million barrels in the week ending March 24th to 56.29 million barrels.

Rystad Energy reported that this week's decision by the Saudi government to cut Aramco's tax burden to 50% from 85% has increased the corporate valuation by 250%, from $400 billion to $1.4 trillion. By drastically reducing the tax rate, more cash will go to the potential owners of Saudi Aramco compared to the Saudi government.

The 238,000 b/d crude distillation unit at Phillips 66 Bayway refinery reportedly returned to service late on Tuesday evening. The unit had been shut since February 8th for planned maintenance work.

A union official at PDVSA's Puerto la Cruz refinery reported Tuesday evening that the company had restarted its catalytic cracker at the 187,000 b/d refinery earlier this week as operators are trying to improve gasoline output to relieve local gasoline shortages. The unit was closed last year due to technical problems with a compressor. Union officials said that a damaged compressor was still keeping it from working at full capacity.


Early Market Call - as of 9:00 AM EDT

WTI - May $49.90, up 39 cents 

RBOB - Apr $1.6855, up 1.29 cents 

HO - Apr $1.5510, up 85 points  


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Oil futures rose after a disruption in Libya's oil supply

March 29, 2017

Recap:  Disruptions to Libya's oil supply, and suggestions that an extension of OPEC's agreement to cut output was likely, combined to kindle a rise in oil futures. Oil futures settled at their highest level in a week, with May WTI finishing at $48.37 a barrel, up 64 cents, or 1.34%, while May Brent closed at $51.33 a barrel, up 58 cents, or 1.14%.

May WTI continued to bounce around the 10-day moving average, while holding below resistance set by the 200-day moving average. With moving oscillators turning to the upside, prompting additional moves higher. With this in mind, we would look for an attempt to trade above the 200-day moving average, currently set at $48.72. Thought this level, resistance is set at $49.50. support remains at $47.

April RBOB rose 1.6 cents, or 1%, to $1.635 a gallon, while April heating oil was  up by 1.4 cents, or 1%, to $1.517 a gallon.

Fundamental News:  Bloomberg reported that crude oil stocks held in Cushing, Oklahoma are estimated to have increased by 1 million barrels in the week ending March 24th to 68.9 million barrels.

Iran's Oil Minister, Bijan Zanganeh, said extending the OPEC and non-OPEC agreement is likely but time is required in order to evaluate the decision.  Iran's current oil production stands close to 3.8 million bpd.  Separately, Iran and Russia pledged to continue cooperation in oil output cuts to stabilize the global energy market, according to statement from Iran's President, Hassan Rouhani and his Russian counterpart, Vladimir Putin.    

A source at Libya's National Oil Corp said production at the western Libyan fields of Sharara and Wafa has been blocked by armed factions, reducing output by 252,000 bpd.  The shutdown at Sharara, which had been producing about 220,000 bpd, began on Monday and the shutdown at Wafa on Sunday.  Libya's NOC declared force majeure on loadings from the Wafa oilfield.

The UAE's Energy Minister, Suhail Al-Mazrouei, said the country expects oil inventories to fall in the second half of the year on demand.  He said the decline in inventories will be reflected in oil prices.  The UAE is cutting its output in March by about 200,000 bpd due to maintenance.

Abu Dhabi National Oil Co said it had informed customers of cuts in crude allocations for May, in line with the OPEC agreement to limit oil supplies.  Both Murban and Das crude grades will be reduced by 7%.

Azeri Energy Ministry said the country is ready to cut output further if OPEC agrees to extend the cuts into the second half of the year.  Azerbaijan agreed in December to cut its daily output by 35,000 bpd but has cut its output by 52,700 bpd in February to 776,400 bpd in February.

Kazakhstan's Energy Minister, Kanat Bozumbayev, said it was too early to say whether the global OPEC and non-OPEC oil output cut would be extended and whether the country would also prolong its commitments.

Nigeria's crude oil experts are expected to increase to 1.66 million bpd in May from 1.61 million bpd in April.

S&P Global Platts trade flow software, cFlow, reported that about 310,000 metric tons of distillates have set sail from the US Gulf Coast for arrival in Europe in April.

IHS data showed that crude and refined product shipments from the US Gulf increased to 4.26 million metric tons on 104 ships in the week ending March 23rd.  It is up 9% from the previous week's 3.91 million metric tons on 100 ships. 


Early Market Call - as of 9:15 AM EDT

WTI - May $48.48 up 11 cents

RBOB - Apr $ 1.6448 up 97 points

HO - Apr $1.5257 up 90 points


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Oil futures fell on doubt that OPEC will extend agreement to cut output

March 28, 2017

Recap: Oil futures fell on Monday on continued oversupply woes and mounting doubt that OPEC will extend its agreement to cut output. For most of the overnight session, both WTI and Brent traded sideways, each within a 30 cent range, before slipping to their lows of the day. By midday, prices rebounded, recouping some of their losses. May WTI settled at $47.73, down 24 cents, or 0.50%. Brent for May delivery fell 5 cents, or 0.10%, to settle at $50.75.  

The Dec17/Dec18 WTI spread continues to hammer out a floor around -0.46, the 50% retracement of -$2.00 and $1.09. Since beginning its ascent from -$2.00, and breaking above -0.46, this spread had been unable to trade below it, the -0.46 level, until Monday. Despite penetrating this level, the Dec17/Dec18 spread failed to hold below it, perhaps due to uncertainty about forward prices. Once again, should break below this level an opportunity will open up for a run at -$0.82, the 62% retracement of the abovementioned range.      

April RBOB settled up 0.9% at $1.619 a gallon, while April heating oil ended at $1.503 a gallon, up 0.3%. 

Fundamental NewsOil producers pledged to consider extending their agreement to limit supply, as six oil producers said more time was needed to deplete large stockpiles.  Five OPEC members and Oman supported an extension, with Kuwait saying it should be for six months.  The ministers asked OPEC to make a recommendation in a month on the possibility of prolonging the supply cuts.  OPEC ministers are due to meet in Vienna on May 25th.  The OPEC/non-OPEC monitoring committee said that as of February, producers participating in the output cut agreement achieved a compliance level of 94%.

Meanwhile, Russia's Energy Minister, Alexander Novak, said Russia was satisfied that OPEC and non-OPEC producers were committed to sticking to an agreement to cut output.  However, Russia is not ready to support a possible extension of cuts into the second half of the year.  He said Russia needs more time to assess the market, inventories and production in the US and other non-OPEC countries.

Iran's Oil Minister, Bijan Zanganeh, is part of a delegation led by Iranian President, Hassan Rouhani, visiting Russia on March 27-28.  Earlier on Monday, Iran's President said he welcomed Russian investment in its gas and oil fields, signaling major developments in energy cooperation between the two countries.

Enterprise Products Partners said Permian Basin crude production is expected to outpace pipeline takeaway capacity by 2020, even as new lines and expansions begin service in the next few years.  Oil production in the Permian Basin of West Texas will reach 3 million bpd by 2020 and surpass 4 million bpd by 2022.  Pipeline takeaway capacity for crude is expected to plateau at about 3.2 million bpd around 2020.

Libya's largest oil terminal is loading its first tanker since fighting between armed groups earlier this month halted shipments from two ports in the country.  The Suezmax vessel Demetrios, which can carry as much as 1 million barrels, is loading at the port of Es Sider for export to China.

According to GasBuddy, US retail gasoline prices on Monday fell below the January 1st price, an unusual decline not seen since at least 2008.  

Oil loading at Venezuela's main crude terminal has been delayed by a logistical problem at one of its three docks.  The Jose port's western dock was shut for nearly two weeks earlier this month after it lost a bumper because a tanker hit it while being loaded during strong winds.  Vessels resumed loading on Sunday but delays have not fully been resolved.  


Early Market Call - as of 9:00 AM EDT

WTI - May $48.18, up 45 cents

RBOB - Apr $1.6389, up 1.97 cents

HO - Apr $1.5176, up 1.5 cents


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Oil futures remained marginally changed due to lack of new fundamentals

March 27, 2017

Recap: On Friday, oil futures were marginally changed, in what was a thinly traded market. Throughout the session, both May WTI and May Brent remained within a 58 cent range due to the lack of any new fundamentals. WTI finished at $47.97, up 27 cents, or 0.57%, while Brent closed up 24 cents, or 0.47%, to settle at $50.80.

April RBOB settled up 1% at $1.605 a gallon, to end the week up 0.4%, while April heating oil added 0.5% at $1.498 a gallon, down about 0.7% for the week.

Fundamental NewsBaker Hughes reported that the number of rigs drilling for oil in the US increased by 21 in the past week to 652 for the week ending March 24th.

Oil Movements reported that OPEC shipments are expected to fall by 160,000 bpd to 23.76 million bpd in the four weeks ending April 8th compared with the previous four week period ending March 11th.

Saudi Arabia said its crude exports to the US would fall by 300,000 bpd between February and March.

A decision on whether Russia supports an extension of the OPEC and non-OPEC output cut agreement beyond June will ultimately be taken in the Kremlin, and private oil companies have limited say.  However, Russian oil companies supporting the extension is a tentative sign that oil price rises have weakened some of the opposition to global production cuts.  Last week, the chief executive of Lukoil, Vagit Alekperov, said it was expedient to continue cuts, as the deal has already brought its first results.  Tatneft said it stood ready for output reduction.  Russneft said that the company was ready to extend production cuts if it serves Russian interests.

Venezuela's PDVSA was rushing to replenish gasoline supplies in various neighborhoods of Caracas on March 23rd as drivers lined up at filling stations amid a worsening shortage of fuel.  While PDVSA says the situation is normalizing and blamed the lines on transport delays, the opposition says the company has had to reduce costly fuel imports as it attempts to preserve cash to pay for its foreign debt.

According to TransCanada, the Keystone XL oil pipeline has been approved by President Donald Trump.  The move overturns a 2015 decision by former President Barack Obama.  The US Department of State has signed and issued a presidential permit to construct the pipeline.  The pipeline will transport more than 800,000 bpd of heavy crude from Canada's oil sands in Alberta into Nebraska, linking to an existing pipeline network feeding US refineries and ports along the Gulf of Mexico.

US biodiesel producers on Thursday asked the US government to impose antidumping duties on imports of biodiesel from Argentina and Indonesia that it says have flooded the US market and violated trade agreements.

Non-OPEC Oman has notified its term customers in Asia that it will reduce supplies by 15% from June to meet local demand and as part of its commitment to cut output under the OPEC and non-OPEC agreement.

IIR reported that US oil refiners are expected to shut in 1.344 million bpd of capacity in the week ending March 24th, increasing available capacity by 373,000 bpd from the previous week.  IIR expects offline capacity to fall to 834,000 bpd in the week ending March 31st and to 466,000 bpd in the following week. 


Early Market Call - as of 9:00 AM EDT

WTI - May $47.38, down 60 cents

RBOB - Apr $1.6012, down 41 points

HO - Apr $1.4895, down 85 points 


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Oil prices moved lower, influenced by an oversupplied market

March 24, 2017

Recap: Oil prices turned lower on Thursday, weighed down by a persistently oversupplied market. May WTI traded within a 90 cent range, settling at $47.70 a barrel, down 34 cents or 0.71%, while Brent for May delivery fell 8 cents, or 0.16%, to settle at $50.56 a barrel.

With oversupply concerns increasing, calendar spreads have moved deeper into contango market conditions. This is evident in the Dec17/Dec18 WTI spread. Back in November, and prior to the OPEC agreement, this spread was trading at a $2.00 discount. Working up to and into the agreement, it traded in positive territory, peaking at $1.09. As previous doubts of adherence to the agreement grew, this spread narrowed back into negative territory, reaching a low of -$0.46, the 50% retracement of -$2.00 and $1.09, before regaining strength. With oversupply concern mounting, this spread is approaching the -$0.46 level once again. A break below this level opens up the possibility for a run at -$0.82, the 62% retracement of the above mentioned range.

April RBOB fell by 1.2 cents, or 0.8%, to $1.590 a gallon and April heating oil finished at $1.490 a gallon, down less than a cent, or 0.5%.

Fundamental NewsGenscape reported that crude oil stocks held in Cushing, Oklahoma in the week ending March 21st increased by 672,000 barrels and by 178,000 barrels from Friday, March 17th to 70.23 million barrels.

An OPEC/non-OPEC monitoring committee meeting this weekend in Kuwait may provide the first signs of whether the agreement will continue past its June expiration.  The committee chaired by Kuwait and includes Algeria and Venezuela and non-OPEC Russia and Oman.  Saudi Arabia, which holds the rotating OPEC presidency, will also attend the meeting on Sunday.  Saudi Arabia has cut its production by 140,000 bpd below its requirement under the agreement to an average output in January-February of 9.92 million bpd.  

Meanwhile, Saudi Arabia and Russia are heading to OPEC's committee meeting this weekend, with Russia continuing its slow pace to implement its full 300,000 bpd production cut.  Saudi Arabia has publically prompted Russia to speed up and implement its full production cut by the end of the month, but Russia's Energy Minister, Alexander Novak, reiterated that it would not reach its target before April.  An analyst stated that confidence in the OPEC/non-OPEC deal is the most important tool to protect oil prices and Saudi Arabia is not expected to openly criticize Russia's compliance as it is not in their interest to scare the market. 

Industry sources stated that Saudi Arabia expects its crude oil supply to remain stable at around 10 million bpd in the next few months, fully in line with the country's OPEC quota.  Saudi Arabia has stressed the importance of focusing on its supply rather than production as supply includes crude delivered to the market, domestically and for export, from the wellhead and from storage. 

Venezuelans have been lining up for scarce gasoline across the country due to increasing problems in the country.  Venezuela has struggled with intermittent gasoline shortages in recent months, especially in the central coastal region.  Long lines were reported in the capital, Caracas and the industrial city of Puerto Ordaz.  In the eastern city of Puerto Ordaz, the problem has been increasing this week and National Guard soldiers were trying to maintain order at operational service stations.  Union leader, Ivan Freites, said Venezuelan refineries, which have been at about half capacity for months amid outages, only had oil inventories for about two days compared with a standard of 15 days.   

According to Politico, the US State Department will approve by Monday the permit needed to proceed with construction of the Canada-to-US Keystone XL oil pipeline. 


Early Market Call - as of 9:00 AM EDT

WTI - May $47.90, up 20 cents

RBOB - Apr $1.5999, up 1 cent

HO - Apr $1.4980, up 81 points 


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Oil futures fell in reaction to 5 million barrel increase in US crude oil inventories

March 23, 2017

Recap: Oil futures fell just over 2.5% in reaction to the 5 million barrel increase in U.S. crude oil inventories. Stockpiles were bolstered by a 1.1 million barrel increase in imports and rising U.S. production. May WTI slipped to $47 a barrel, marking a new 4-month low, while Brent for May delivery bottomed at $49.71, its lowest level in 4-months.

By early afternoon, prices staged a comeback, with both blends rising to new session highs on technical short covering and statements by the Saudi oil minister alluding to the possibility of Iran making cuts and an extension of the current output agreement. May WTI worked its way back over $48 a barrel, to settle at $48.04, down 20 cents, or 0.41%, while May Brent settled at $50.64 a barrel, down 32 cents, or 0.63%

April RBOB fell less than half a cent, or 0.2%, to $1.602 a gallon and April heating oil lost under a cent, or 0.4%, to $1.497 a gallon.

Fundamental NewsWhile it is unlikely that Iran would agree to cut its production, sources reported that Saudi Arabia may insist on Iran cutting its output in order to continue OPEC's output cut agreement.

Russia has not ruled out extending an OPEC and non-OPEC output cut agreement, with the final decision dependent on Saudi Arabia, according to Russia's envoy to international organizations, Vladimir Voronkov.

Goldman Sachs reported that OPEC cuts are expected to impact Gulf Coast supply in 35-45 days.  It said the cut will also have an unintended consequence of spurring shale activity, which along with a delayed delivery of the 2011-2013 capex boom, may lead to record non-OPEC output growth in 2018.

A board member at Libya's National Oil Corp, Jadalla Alaokali, said the country's oil production increased to 699,000 bpd.  He also stated that a tanker is set to load at the Es Sider port on March 26th.  Separately, Libya's NOC said the country plans to raise its output at its Sharara field by 70,000 bpd in weeks.  The fields is currently producing 221,000 bpd.  

Oman's crude oil production fell to about 883,000 bpd in January from 884,000 in December and from 923,000 bpd in October, the benchmark month from which production cuts are calculated under the OPEC agreement.

Angola exported 1.685 million bpd of crude in January, up 7% on the month.  The figure is just above its production quota of 1.673 million bpd allocated under OPEC's output cut agreement.

Genscape reported that crude storage in the ARA region increased by 7.3% or 4.06 million barrels to 59.48 million barrels in the week ending March 17th.

Kinder Morgan Texas Pipeline LLC said the Gulf Coat Express Pipeline will be in service in the second half of 2019, subject to shipper commitment.  Separately, Kinder Morgan said the open season for the TransMountain expansion was concluded.  It said firm shippers have made 15 and 20 year commitments of 707,500 bpd or about 80% on the expanded pipeline.  It said the other 20% of capacity is reserved for spot volumes as required by the National Energy Board.

IIR reported that US oil refiners are expected to shut in 1.357 million bpd of capacity in the week ending March 24th, raising available refining capacity by 385,000 bpd from the previous week.  IIR also expects offline capacity to fall to 795,000 bpd in the week ending March 31st.  


Early Market Call - as of 9:00 AM EDT

WTI - Apr $47.85, down 20 cents

RBOB - Apr $1.5825, down 1.92 cents

HO - Apr $1.4956, down 10 points 


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