DTN Oil Update
ULSD Rises Amid Winter Storm, Oil Slips on Output Returns
VIENNA (DTN) -- ULSD futures continued to rise Monday, Jan. 26, morning as harsh winter weather in the U.S. led to higher diesel fuel and heating oil demand. Crude oil and gasoline futures, meanwhile, edged lower after Kazakh oil export terminals started to operate at full capacity following a prolonged outage.
The U.S. Dollar Index's tumble to a four-month low of 97.07 against a basket of foreign currencies limited the price decline in oil and commodities denominated in the greenback.
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NYMEX ULSD futures for February delivery strengthened $0.0727 to a two-month high $2.5012 gallon.
In crude, WTI futures for February delivery fell $0.40 to $60.67 bbl, while ICE Brent for March delivery retreated $0.38 to $65.50 bbl.
Front-month RBOB futures slipped $0.0311 to $1.8199 gallon.
Freezing temperatures and storms have forced shut some 250,000 bpd of U.S. crude oil production since the weekend. These supply losses, however, were dwarfed by more permanent production returns elsewhere. Kazakhstan's Black Sea loadings returned to full capacity on Sunday, allowing the partial restart of production at the country's largest oil field.
ULSD futures bucked the bearish trend in oil as harsh winter weather gripped large parts of the U.S. amid historically tight inventories.
On the East Coast, where fuel oil remains an important source of heating, distillate fuel oil inventories were until last week at multi-year lows and remained 14% below the five-year seasonal average, according to Energy Information Administration data.
Diesel fuel demand also jumped as some parts of the country were buried in more than a foot of snow.