Recap: NYMEX ULSD (HO) continued its climb up Friday, still supported by sustained cold temperature forecasts through the beginning of February keeping heating demand strong upon the backdrop of PADD 1 distillate stocks at a 21% deficit to last year. The contract closed 6.09 cents higher to 3.1374, but continued to climb up past 3.1543 in after-hours trading. The Feb-Mar backwardation expanded out to a whopping 12.16 cents (See the backwardation explosion since Jan 13th chart below). We were hoping that with the contract expiry next Friday, this backwardation would start to flush out. However, the Mar-Apr backwardation has already started to build to 5.19 cents as of Friday's close, indicating that the March contract will replace the February contract with another backwardation, the indicator the market is worried about tight supplies. Despite the arrival of 6 Russian tankers importing product to Boston, Providence, New York (2), Baltimore, and Charleston (SC) this past weekend through Feb 1st, that information did not hold heating oil markets down. It could be worse, like NYMEX Natural Gas closing up 45.2 cents to 5.182! NYMEX RBOB (Gasoline) was most likely lifted by ULSD, closing up 14 points to 2.6632 after being down most of the session. On the other hand, NYMEX Crude lost 68 cents to settle at 96.64, likely prompted by economic concerns in emerging markets that triggered declines on both global and U.S. stock exchanges. ICE Brent closed 30 cents up to 107.88.
Currently, oil markets are mixed, with NYMEX ULSD (HO) already up 2.42 cents at 3.1616, after hitting 3.1835 in overnight trading. The Feb-Mar backwardation has expanded even more, to 14.68 cents. Cold temp fundamentals will continue to support ULSD through this week. NYMEX RBOB is down 1.35 cents to 2.6497, NYMEX Crude is up 26 cents to 96.90 and ICE Brent is down 65 cents to 107.23.
Heating Demand Still On: HDD Forecast: Fax-Alert Weather Service has forecasted heating degree day (HDD) % of normal in its Ten Day Temperature Guidance report for the period January 27th through February 5th for the following Northeast locations. HDD percentages above 100% indicate the additional HDDs above normal for the time period:
New York: NYC 106%, Binghamton 109%, Albany 107%, Newburgh 104%
New Jersey: Newark 110%, Trenton 109%
Pennsylvania: Philly 113%
Massachusetts: Boston 106%, Worcester 108%, Chicopee 118%, Hyannis 103%
Connecticut: Hartford 107%, Bridgeport 105%, New Haven 104%
NH: Manchester 102%, Portsmouth 104%, Lebanon 108%, Concord, 107%
Maine: Portland 103%, Augusta 102%, Bangor 106%
Vermont: Burlington 102%, Rutland 107% Rhode Island:
Providence 104%Click to view today's Refined Products MarketWatch report