DTN Oil Update

Barani Krishnan
DTN Analyst

SECAUCUS, N.J. (DTN) -- ULSD futures edged higher Friday, Dec. 5, morning, supported by global supply concerns while gasoline and oil prices steadied on expectations of a Federal Reserve rate cut next week.

NYMEX front-month ULSD futures were up $0.039 to $2.3436 gallon after a session high at $2.3469.

Front-month RBOB futures rose $0.0018 to $1.8290 gallon after rallying to $1.8350.

WTI futures for January delivery dipped $0.09 to $59.58 bbl, while ICE Brent for February delivery dipped $0.04 to $63.22 bbl.

The U.S. Dollar Index was little changed at 98.945 against a basket of foreign currencies.

Traders said ULSD was supported by recent maintenance events at global refineries that had limited the worldwide supply of diesel.

Also lending support, they said, was Russia's disinterest in seeing a quick end to the war in Ukraine unless the settlement was on its terms. Russian diesel supplies have been crimped by Ukrainian strikes on refineries and by U.S. sanctions against Russian energy firms Rosneft and Lukoil, as Washington tries to find a solution to the near four-year long Ukraine conflict.

White House senior adviser Kevin Hassett's remarks to media that it was "time for the Fed to cautiously reduce rates" boosted sentiment in crude oil and gasoline, which typically move according to economic expectations.

Markets are expecting the Fed to agree to a third 25-basis point rate cut this year at the Wednesday, Dec. 10, meeting of the central bank's policy-making Federal Open Market Committee. According to CME's FedWatch tool, only 12% of traders expect rates to remain in the 3.75-4% target range.