DTN Oil Update
ULSD Futures Rebound on Russia's Push on Ukraine War
SECAUCUS, N.J. (DTN) -- The NYMEX ULSD futures contract for January delivery reversed early losses to settle higher Thursday as crude prices were boosted by Russia's demands for a change in a U.S. peace plan for Ukraine. Market participants expect limited supplies as this move could keep sanctions intact for now on Russian oil.
Additionally, concerns of an imminent attack on Venezuela by the U.S. army also boosted the geopolitical premium that had been slacking in oil for months.
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U.S. President Donald Trump revived on Wednesday a threat to launch land strikes "very soon" on alleged Venezuelan drug cartels. According to the Organization of the Petroleum Exporting Countries, of which Venezuela is a member, the Latin American country holds approximately 300 billion barrels (bbl) in oil reserves -- among the largest in the world. OPEC data also indicates Venezuela's oil production reached nearly 1.1 million barrels per day (bpd) in October.
ULSD rebounded while gasoline and crude futures extended their run-up from Thursday morning amid media reports that Ukrainian negotiators will join a new round of talks in Florida as Russian President Vladimir Putin said some of the points in a U.S.-backed peace plan for Ukraine were unacceptable to him.
"This is yet another sign of how far we are from the deal that the market has been banking on for weeks," John Kilduff, partner at a New York energy hedge fund, told DTN.
Putin, on a state visit to New Delhi, also defended India's right to buy oil from his country amid sanctions against Moscow-based energy firms Rosneft and Lukoil that have stranded at sea millions of barrels intended for Indian and Chinese refineries.
A rally in the U.S. dollar, however, limited the advance in fuel and crude oil prices towards Thursday's close.
NYMEX ULSD futures for January delivery settled up $0.028 at $2.3037 gallon after sliding to $2.2693 earlier.
Front-month RBOB futures closed flat at $1.8271 gallon after rallying to $1.8386 earlier.
WTI futures for January delivery finished the session up $0.77 bbl at $59.67 bbl, while ICE Brent for February delivery advanced $0.56 to $63.23 bbl.
The U.S. Dollar Index rebounded by up 0.164 points to 98.96 against a basket of foreign currencies.
