Oil Prices Rise for Seventh-Straight Day as WTI and Brent Aim for New 2024 Highs
In a surprising turn of events, West Texas Intermediate (WTI) crude and Brent futures are experiencing significant gains, while refined product contracts are showing mixed results. With March WTI up by approximately $1 per barrel, the contract is on track for a seventh-straight day of gains. Both WTI and Brent are also moving towards potentially reaching new highs for 2024.
Trade sources are struggling to pinpoint the cause of this rally, considering that equities are trending downward following a higher-than-anticipated inflation reading for January, combined with a stronger dollar. Despite these factors, the market seems to be firmly under the influence of upward oil price trends.
March WTI has surpassed the $78 per barrel mark, with Brent surpassing $83 per barrel. However, current prices of both contracts are about $1 per barrel lower than the highest points reached in 2024. Front-month WTI reached $78.15 per barrel before slightly pulling back to trade at $77.90 per barrel, representing a gain of 98 cents. Similarly, April Brent hit $83.04 per barrel before pulling back to $82.80 per barrel, marking a gain of 80 cents.
At noon ET, refined products were showing different movements, with RBOB (reformulated gasoline blendstock for oxygen blending) futures increasing by several cents and ULSD (ultra-low sulfur diesel) experiencing nominal decreases. Front-month RBOB futures were trading around the $2.40 per gallon level, specifically at $2.3994 per gallon, reflecting a gain of 3.21 cents. The March contract outperformed April, reaching a gain of 2.96 cents at $2.6199 per gallon. The spread between the two contracts has remained steady, averaging approximately 22.5 cents per gallon since the start of February.
Most cash markets are following the upward trajectory of RBOB futures, except for the Gulf Coast and Group 3 regions where discounts are narrowing in comparison to futures, resulting in slightly higher prices of about 5 cents per gallon. ULSD, on the other hand, initially saw an increase of approximately 4.5 cents per gallon but eventually settled at relatively flat levels.
In contrast, natural gas futures have decreased significantly, with March contracts trading below $1.70 per million British thermal units (mmbtu). Additionally, a warming trend in Europe is expected, which could be impacting the decline in diesel prices due to a softening heating oil/gasoil spread.
At midday, March ULSD was up approximately half a cent at $2.9249 per gallon, while the April contract increased just over a penny at $2.8486 per gallon.
Analyst comment
Positive news. Oil prices are rising for the seventh consecutive day, with WTI and Brent aiming for new highs in 2024. Despite downward trends in equities and a stronger dollar, the market is influenced by upward oil price trends. Analyst prediction: Oil prices will continue to rise in the short term, potentially reaching new highs for 2024.
