By Crude oil futures saw an increase on Monday as Saudi Arabia and Russia confirmed their commitment to limit output for the remainder of the year. While this was widely anticipated, experts believe that oil prices currently lack a geopolitical premium, despite recent events in the Middle East.
Oil Prices Show Mixed Performance
The NYMEX December West Texas Intermediate contract rose by $1.35 to reach $81.86/barrel at midday. However, this is still below the level it reached before the Hamas attack on Israel in early October. On the other hand, Brent experienced a $1.17 increase, reaching $86.06/bbl. Nonetheless, prices have been weakening during afternoon trading sessions over the past few days.
Gasoline Futures May Be Stabilizing
After weeks of decline, gasoline futures seem to be finding some stability. The NYMEX December RBOB contract saw an increase of 4.65 cents, reaching $2.2475 per gallon.
Regional Price Variations
Certain cash markets in the United States, including the Gulf Coast, have seen prices rise by 7 to 8 cents from their fall lows. However, OPIS data shows that rack prices for E10 are below $2/gal in Alabama, Louisiana, Mississippi, Tennessee, and Texas.
Lower Retail Prices
With wholesale values influencing the market, retail prices have dropped. On Monday, the most common pump price in the U.S. was $2.999/gal, according to OPIS data.
Diesel Futures Show Modest Increase
Diesel futures experienced a slight uptick, indicating positive movement in the market. The Energy Information Administration (EIA) will not be releasing supply and demand data this week due to system upgrades. However, industry insiders are suggesting that both domestic demand and exports are contributing to reduced diesel stocks. The NYMEX December ULSD contract rose by 2.61 cents to $2.9499/gal around midday.
Refined Product Prices Affected by Refinery Maintenance
Refined product prices are expected to be influenced by the return of US refineries from their fall maintenance season. Monroe Energy is currently restarting the crude unit at its Trainer, Pa., refinery, and conversion units are set to follow suit later this month.
In the West Coast region, sources indicate that an FCC at PBF Energy’s Torrance, Calif., facility will likely remain offline for the majority of November. However, the most critical period for California is projected to be in the first quarter of 2024 when Phillips 66 plans to cease production of traditional fuels in favor of renewable alternatives at its San Francisco area refinery.
Additional downtime is also expected at Valero and Phillips 66 refineries in Southern California during the months of February and March.
Edit by Jeff Barber
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