Oil Prices Falter Late in the Day as Short-Covering Momentum Fades

Strategic Insights -

Oil prices experienced an early rally on Thursday, inspired by short-covering and technical plays, but momentum faltered late in the day. Traders were covering their positions ahead of the expiration of the April contract in New York, which contributed to the rally. However, as the day progressed, prices lost steam, with April New York Mercantile Exchange (Nymex) light, sweet crude falling to $14.31/bbl, down 3 cents from the previous day's settlement. May crude prices also declined, closing at $14.60/bbl, down just 1 cent from the session high.

Key Takeaways:

  • The April Nymex light, sweet crude contract settled at $14.31/bbl, down 3 cents from the previous day's settlement.
  • May crude prices rose to a session high of $14.99/bbl, but closed down just 1 cent at $14.60/bbl.
  • The trans-Atlantic arbitrage remained attractive at $1.49/bbl.
  • Front-month Nymex product futures saw early support, but heating oil then headed for the downside, with prices dipping to an intraday low of 40.55 cents/gallon.
  • Natural gas prices advanced 6.1 cents to settle at $2.300/MMBtu, due to larger-than-expected storage withdrawals.
  • Spot liquefied petroleum gas (LPG) prices firmed slightly over the week in Texas and Kansas, supported by petrochemical demand on the Gulf Coast.
  • The weekly propane inventory report from the Energy Information Administration (EIA) confirmed that demand rose last week, with domestic propane stocks falling 900,000 bbl from the previous week.

Statistics:

  • April Nymex light, sweet crude settled at $14.31/bbl, representing a 3-cent decrease from the previous day.
  • May crude closed at $14.60/bbl, down just 1 cent from the session high.
  • Natural gas prices advanced 6.1 cents to settle at $2.300/MMBtu.
  • Spot liquefied petroleum gas (LPG) prices firmed 2-5 cents in Texas and Kansas.
  • Propane inventory draw: 900,000 bbl from the previous week, according to the Energy Information Administration (EIA).
  • Trans-Atlantic arbitrage spread: $1.49/bbl.

Sources:

  • Bloomberg
  • Energy Information Administration (EIA)
  • Nymex
  • International Petroleum Exchange