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Petroleum

Crude, Oil Products, and Natural Gas Prices Rise Due to Bullish Supply Indicators and Colder Weather

Strategic Insights

— 1 min read

Crude, oil products, and natural gas prices saw significant increases on Wednesday due to a combination of factors, including a Brazilian oil workers' strike, colder weather forecasts, and bullish supply indicators. The strike by Brazilian oil workers, which began on Wednesday, has caught state oil company Petrobras with low product inventories, raising hopes that spot product markets on the Gulf Coast could benefit from any Brazilian shortfalls. Meanwhile, the Organization of Petroleum Exporting Countries (OPEC) has announced plans to maintain its output ceiling at 24.52 million b/d, further contributing to the price surge.

Key Takeaways:

  • Nymex light sweet crude futures for January delivery settled at 18.15/bbl, up 33 cents from Tuesday, while February crude rose 33 cents to $18.15/bbl and March rose 31 cents to a high of $18.13.
  • The Brazilian oil workers' strike has caught Petrobras with low product inventories, potentially benefiting spot product markets on the Gulf Coast.
  • Heating oil showed the most impressive gains in heavy trading, with December heating oil soaring 1.72 cents to settle at 50.87 cents/gallon.
  • The Brazilian oil workers' strike helped boost the December reformulated gasoline (RFG) contract 0.37 cents to 55.67 cents/gallon, despite bearish inventory reports for the previous week.
  • January natural gas rose as high as $1.91/MMBtu in morning trading but fell through the afternoon to settle at $1.875/MMBtu, up only 0.1 cents from Tuesday.
  • February natural gas rose 1.2 cents to settle even with January at $1.875/MMBtu.

Statistics:

  • Nymex light sweet crude futures for January delivery traded between $17.70 and 18.19/bbl before settling at 18.15/bbl.
  • February crude rose 33 cents to $18.15/bbl.
  • March crude rose 31 cents to a high of $18.13.
  • December heating oil soared 1.72 cents to settle at 50.87 cents/gallon.
  • January heating oil rose 1.49 cents to 51.24 cents/gallon.
  • March heating oil rose 1.44 cents to 51.81 cents/gallon.
  • December reformulated gasoline (RFG) contract rose 0.37 cents to 55.67 cents/gallon.
  • January RFG contract rose 0.81 cents to 55.25 cents/gallon.
  • February RFG contract rose 0.92 cents to 55.36 cents/gallon.
  • January natural gas rose as high as $1.91/MMBtu in morning trading.
  • February natural gas rose 1.2 cents to settle even with January at $1.875/MMBtu.

Sources:

  • Bloomberg
  • OilPrice.com

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