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Petroleum

Crude Futures Prices Slump on Rumors of Brazilian Oil Workers' Strike End

Strategic Insights

— 2 min read

Crude futures prices declined significantly on the New York Mercantile Exchange (Nymex) as rumors spread that the 21-day Brazilian oil workers' strike could come to an end. The June futures contract closed at $19.81/bbl, down 25 cents from the previous day, while the July contract settled at $19.84/bbl, down 7 cents. Reports of a meeting between union representatives and Petrobras officials, state-owned oil monopoly, fueled the market's pessimism.

Key Takeaways:

  • The June crude futures contract closed at $19.81/bbl, down 25 cents from the previous day, while the July contract settled at $19.84/bbl, down 7 cents.
  • Petrobras chartered tankers to import 1.39 million to 2.36 million bbl of products, mostly gasoline and gas oil, from various regions between May 27 and June 5.
  • Two tankers carrying over 400,000 bbl will come from the United States.
  • Sources remain bullish, expecting a rebound after a price correction over the next month, with a predicted price range of $19.50-$20.50/bbl for the July contract.
  • Gasoline prices on Nymex recovered from their daily lows on news that a catalytic cracker at Marathon Oil Co.'s 70,000 b/d refinery in Texas City, Texas, will be restarted by Friday or early next week.
  • Forecasts suggest that gasoline prices will maintain their upward trend, with the June contract possibly touching 67 cents/gallon or even 68 cents/gallon before its expiration.
  • The June gasoline/crude crack spread on Nymex remained strong, widening to $8.10/bbl, while the July crack spread ended at $6.69.

Statistics:

  • $19.81/bbl: Closing price for the June crude futures contract.
  • $19.84/bbl: Settlement price for the July crude futures contract.
  • 25 cents: Decline in the June crude futures contract from the previous day.
  • 7 cents: Decline in the July crude futures contract from the previous day.
  • 1.39 million to 2.36 million bbl: Range of products imported by Petrobras between May 27 and June 5.
  • 400,000 bbl: Amount of products carried by two tankers from the United States.
  • 67 cents/gallon: Forecasted price for the June gasoline contract before its expiration.
  • 68 cents/gallon: Forecasted price for the June gasoline contract from another New York-based source.
  • $8.10/bbl: June gasoline/crude crack spread on Nymex.
  • $6.69/bbl: July gasoline/crude crack spread on Nymex.

Sources:

  • New York Mercantile Exchange (Nymex)
  • Petroleos Brasileiro S.A. (Petrobras)
  • Refco Inc.
  • Marathon Oil Co.

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