Oil Markets Rally to New Record Highs Amid Concerns over Product Supply

The oil market reached new heights as investors shrugged off OPEC's decision to increase crude output and focused on concerns over product supply. A surprise decline in US gasoline stocks and a drop in distillate stocks sparked market activity, with Nymex and IPE futures trading at record highs. Non-commercial funds increased their net long positions in Nymex crude to an eight-month high, signaling their bullish stance on the market.

Key Takeaways:

US gasoline stocks dropped by 2.9mn bl, leading to a new record high in gasoline futures, reaching 158.50 cents/USG.
Distillate stocks also decreased, with a 2.4mn bl fall in heating oil stocks sending Nymex heating oil to a fresh high of 161.74 cents/USG.
Nymex WTI April futures traded between $52.50/bl and a new record high of $57.60/bl, settling up by nearly $3/bl on the week.
The IPE May Brent contract hit an all-time high of $56.15/bl, with the IPE April contract expiring at $54.95/bl on 16 March.
Gasoil traded at an all-time high of $505.50/t on the IPE, although volumes were sharply down on the week.
Speculators switched from short positions to 4,420 lots net long on heating oil in the week ending 8 March.
Non-commercial funds increased Nymex crude positions to an eight-month high of 76,663 lots net long in the week to 8 March.
The 12-month forward WTI contract settled at $55.27/bl, with Nymex crude holding above $51/bl until December 2007.

Statistics:

2.9mn bl: surprise decline in US gasoline stocks
2.4mn bl: fall in heating oil stocks
158.50 cents/USG: new record high in gasoline futures
161.74 cents/USG: fresh high in Nymex heating oil
$57.60/bl: new record high in Nymex WTI April futures
$55.27/bl: 12-month forward WTI contract settlement
$51/bl: Nymex crude price until December 2007
76,663: Nymex crude positions held by non-commercial funds (net long)
4,420: speculators' net long positions on heating oil

Sources:

Opec - no specific date
Nymex - no specific date