NEW YORK (DTN) -- New York Mercantile Exchange oil futures settled mixed this afternoon, with the West Texas Intermediate crude and ULSD contracts edging higher, Brent crude on the IntercontinentalExchange little changed while RBOB futures plummeted.
RBOB futures came under intense selling pressure after Colonial Pipeline said it completed a bypass line that reroutes gasoline around a damaged section of its Line 1 in Alabama, whose operation was impacted by a leak on Sept. 9. Line 1 has had restricted service since the incident, with full service projected to be restored Wednesday, the company said.
Colonial's main gasoline Line 1 runs from Houston, Texas to Greensboro, North Carolina, where it connects with Line 3 for service to Linden, New Jersey.
NYMEX October RBOB futures plunged 5.62 cents to settle at $1.3646 gallon, paring a decline to a $1.3392 one-week low. NYMEX October ULSD futures settled up 1.06 cents at $1.4050 gallon, reversing off a $1.37 five-week low on the spot continuation chart.
NYMEX October West Texas Intermediate crude futures expired 14 cents higher at $43.44 per barrel (bbl), reversing off a $42.55 five-week spot low. The November WTI contract settled up 19 cents to $44.05. ICE November Brent futures settled 7 cents lower at $45.88 bbl, off a $45.09 five-week spot low.
Initially pressured by oversupply, NYMEX WTI and ULSD futures reversed higher after a Russian official said they would support a one-year deal with the Organization of Petroleum Exporting Countries to cooperate in stabilizing the market. The comment shifted expectations to a greater likelihood that an agreement to freeze production would be reached by OPEC when they meet informal talks alongside an International Energy Forum in Algiers on Sept. 26-28.
"The WTI market was hanging on to those comments coming out of Russia, but it depends on how you read them," said Tom Bentz, head of energy derivatives at ABN AMRO. "Some people think any agreement is an achievement, and Russian support for a freeze in output is very supportive of crude prices. But at the same time a one-year freeze at these high levels of production for OPEC is not bullish for some people. That's probably what's keeping Brent down."
Bentz also said short covering boosted WTI futures in front of the afternoon expiration of the October contract.
George Orwel can be reached at firstname.lastname@example.org
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