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Petroleum

Crude Contracts Rise Amid Choppy Trading on Nymex

Strategic Insights

— 2 min read

Crude contracts on the New York Mercantile Exchange (Nymex) experienced a slight increase on Friday, with the April crude contract settling up 10 cents at $18.26/bbl. This came as traders moved their positions out of the soon-to-expire April contract and into the May and June contracts. Meanwhile, spot gasoline prices remained firm, with Valero Energy Corp. reducing its MTBE production at its Corpus Christi, Texas, refinery. Refinery cutbacks have tightened supply, leading traders to be optimistic about price recovery. Gasoline prices continued their short-term bullish trend, with the April contract settling up 0.44 cents at 55.37 cents/gallon.

Key Takeaways:

  • The April crude contract settled up 10 cents at $18.26/bbl, with the May contract settling up 8 cents at $18.21.
  • Traders moved their positions out of the soon-to-expire April contract and into the May and June contracts.
  • Valero Energy Corp. reduced its MTBE production at its Corpus Christi, Texas, refinery, contributing to firm spot gasoline prices.
  • The price of MTBE fell as low as 0.63 cents/bbl on the spot market last week, but refinery cutbacks have tightened supply.
  • The April gasoline contract settled up 0.44 cents at 55.37 cents/gallon.
  • The gasoline contract on Nymex remained the strongest contract of the week, keeping the gasoline/crude spread at around $5/bbl.
  • Heating oil contracts on Nymex traded higher, but were unable to overcome resistance levels and are likely to move downward this week.
  • The April heating oil contract will probably trade down as low as 44 cents/gallon.

Statistics:

  • The April crude contract settled up 10 cents at $18.26/bbl.
  • The May contract settled up 8 cents at $18.21.
  • The April gasoline contract settled up 0.44 cents at 55.37 cents/gallon.
  • The gasoline contract on Nymex remained the strongest contract of the week, keeping the gasoline/crude spread at around $5/bbl.
  • The April heating oil contract settled up 0.7 cents at 46.07 cents/gallon.
  • The price of MTBE fell as low as 0.63 cents/bbl on the spot market last week.

Sources:

  • "Crude contracts have had a reasonable rally after a sell-off, but they will continue to trade in a choppy style, moving lower over the next several days," according to Alan H. Levine, a vice president at Smith Barney Inc.
  • "There is enough uncertainty about seasonal specifications to support prices right now, but gasoline is becoming overbought, and a setback will occur," one Houston-based futures trader said.
  • "The April heating oil contract will probably trade down as low as 44 cents/gallon, but don't forget that the contract's annual low traditionally comes in the first quarter of the year," one analyst said.
  • Texas Petrochemicals Corp. closed its 10,000 b/d MTBE refining unit in Houston due to low prices, announcing it will delay its restart to April 1 because of continued poor margins.

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