Crude futures pulled up by heating oil strength
Global crude futures traded higher Tuesday morning, catching up with
Monday’s gasoline rally as well as finding support from heating oil contracts,
In the medium term support will be found as refinery maintenance season
in the US ends, thereby increasing crude oil demand.
At 10:58 GMT the May ICE Brent futures contract changed hands at
$60.98/barrel, up 46 cents from Monday. The new front-month May ICE WTI
futures contract was pegged at $60.11/b up 22 cents.
"There are some short-term forecasts for cold weather in Europe and the
US. This has provided strength in the heating oil contracts" Frederic
Lasserre, head of commodities research at Societe Generale said.
The NYMEX April WTI futures contract, expiring at the end of trading
Tuesday, was changing hands at $56.82/b up 23 cents. The more liquid May
contract was pegged at $60.11/b, up 41 cents. The contango between April and
May futures settled on Monday at minus $3.11/b, just shy of the all-time low
posted November 16 of minus $3.16/b.
The weakness in the front contract has been widely attributed to long
position holders rolling forward positions to the May contract before the
April contract expires later Tuesday.
Further to this Frederic Lasserre said that weakness in the WTI futures
has been due to "a huge maintenance and turnaround season in the US and from
this US refiners have been absent from the market"
Market players are turning to Wednesday’s US inventory data and early
expectations are for builds in crude stocks but falls in products. However, as
refinery maintenance season ends in the US analysts expect refiners to work to
full capacity to produces gasoline and take advantage of the significant crack
"We are on the eve of an increase in refinery utilization and within one
or two weeks we are expecting a build in gasoline stocks" Frederic Lasserre
Among the products, heating oil either side of the Atlantic was the main
mover. April ICE gasoil futures rose $2.50/mt to $534.75/mt. The April NYMEX
heating oil contract was pegged at $1.7084/gallon, up 2 cents. NYMEX RBOB
futures, after gaining 5 cents on Monday, was trading down by 0.11 cents
at $1.9552/gal, in early electronic trading.
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