Oil Prices Rebound Amid Global Tensions and Supply Concerns

Strategic Insights -

Oil prices rebounded across the board on Monday as many traders decided last week's sharp sell-off was overdone in view of the longer-term supply outlook. The price of October 1994 West Texas Intermediate crude oil futures increased by 49 cents/bbl, reaching $17.63/bbl on the New York Mercantile Exchange. This rebound was fueled by tight supplies projected over the final three months of the year, as well as the impact of Nigeria's ongoing oil workers' strike.

Key Takeaways:

  • The price of October 1994 West Texas Intermediate crude oil futures increased by 49 cents/bbl, reaching $17.63/bbl on the New York Mercantile Exchange.
  • Unleaded regular gasoline futures for September delivery to New York Harbor rose 1.37 cents/gallon to 51.54 cents/gallon.
  • No. 2 heating oil futures gained 0.66 cents to 48.84 cents/gallon.
  • The 3-2-1 crack spread, based on two gasoline contracts plus one heating oil contract minus three WTI contracts, recovered to $3.64/bbl from only $3.09 last Thursday.
  • Refiners are hoping to make $4 or better on the 3-2-1 crack spread.
  • Plans by Tosco Corp. to do extended maintenance on the country's largest catalytic cracker at Bayway, N.J. have aided the price rebound.
  • Oil companies cut wholesale prices for unleaded regular gasoline by 0.29 cents to 59.15 cents/gallon and No. 2 by 0.25 cents to 52.85 cents/gallon, but raised prices 0.05 cents on low-sulfur diesel to 54.03 cents/gallon.

Statistics:

  • The price of October 1994 WTI crude oil futures increased by 49 cents/bbl, reaching $17.63/bbl.
  • Unleaded regular gasoline futures for September delivery to New York Harbor rose 1.37 cents/gallon to 51.54 cents/gallon.
  • No. 2 heating oil futures gained 0.66 cents to 48.84 cents/gallon.
  • The 3-2-1 crack spread recovered to $3.64/bbl from $3.09 last Thursday.
  • Oil prices plummeted nearly $3.50/bbl during August.
  • West Texas Intermediate (WTI) crude oil futures were reduced to $15.50 after leading buyers of domestic crudes cut posted prices 50 cents/bbl.
  • September natural gas futures rose 4.4 cents to $1.661/MMBtu.
  • Gas storage reservoirs are 80% full, with cash prices depressed to a range of $1.41-$1.45/MMBtu at the Louisiana Gulf Coast.

Sources:

  • The Oil Daily
  • Computer Petroleum Corp.
  • New York Mercantile Exchange
  • International Petroleum Exchange
  • Tosco Corp.