Crude Prices Firm, Gasoline Prices Edge Higher Amid Light Trading

Strategic Insights -

Largely technical trading kept crude prices relatively stable, while gasoline prices gained ground due to active trading in gasoline crack and calendar spreads. The December crude contract on the New York Mercantile Exchange (Nymex) traded in a narrow 17-cent range, settling up 8 cents at $17.62/bbl. Meanwhile, gasoline prices on Nymex looked stronger, settling up 0.68 cents at 50.74 cents/gallon, influenced by a widening crude/gasoline crack spread and last-minute short-covering before the November contract expires.

Key Takeaways:

  • Crude prices remained range-bound, with the December contract on Nymex trading in a 17-cent range and settling up 8 cents at $17.62/bbl.
  • Gasoline prices on Nymex edged higher, settling up 0.68 cents at 50.74 cents/gallon, due to active trading in gasoline crack and calendar spreads.
  • The crude/gasoline crack spread widened to $3.69/bbl from $3.50 on Friday, contributing to higher gasoline prices.
  • Refinery turnarounds in Europe have reduced the availability of imports, supporting gasoline prices in the region.
  • Analyst Timothy P. Evans of Pegasus Econometric Group predicted that the gasoline crack spread will come under pressure once U.S. and European refineries return from turnarounds and operating rates pick up.
  • Heating oil and natural gas prices on Nymex rose, with heating oil settling up 0.26 cents at 50.59/gallon and natural gas ending the day up 1.1 cents at $1.85/MMBtu, due to predictions of a colder-than-normal winter.

Statistics:

  • Crude price range: $17.45 - $17.62/bbl
  • Crude/gasoline crack spread: $3.69/bbl (up from $3.50 on Friday)
  • Gasoline price settlement: 50.74 cents/gallon (up 0.68 cents from previous day)
  • Heating oil price settlement: 50.59/gallon (up 0.26 cents from previous day)
  • Natural gas price settlement: $1.85/MMBtu (up 1.1 cents from previous day)

Sources:

  • One trader, quoted in article (no specific name or title mentioned)
  • Timothy P. Evans, analyst with New York-based Pegasus Econometric Group
  • Smith Barney, Harris Upham & Co. meteorologist Jon Davis