Oil Futures Settle Near 1-Month Lows

Brian L Milne
By  Brian L. Milne , DTN Refined Fuels Editor

CRANBURY, N.J. (DTN) -- Oil futures traded on the New York Mercantile Exchange and Brent crude on the IntercontinentalExchange settled near one-month lows during the final day of trade for October, as expectations for the Organization of the Petroleum Exporting Countries to enact a cut in production during their formal meeting on Nov. 30 diminished amid internal disagreement.

It was the third straight down session and the second with steep losses, as OPEC failed to reach agreement on Friday, Oct. 28, on individual member quotas, and over the weekend in enlisting support from non-OPEC members including Russia, Brazil, and Azerbaijan.

Monday's selloff retraces the rally sparked by news OPEC had reached a framework to cut production by as much as 700,000 bpd on Sept. 28 in Algiers. A technical committee created to fill in the accord's missing details met late last week, but so far has been unable to reach consensus for a quota agreement that would be voted on by OPEC during their biannual meeting Nov. 30, with disagreements ranging from member exemptions, to quota-determined cuts, and from what set of statistics should be used in establishing a member's production rate.

OPEC's inability to secure an agreement among its members appeared to derail an attempt for coordinated crude production cuts by OPEC and non-OPEC on Saturday despite marathon discussions.

Today's selloff also came in front of the contract expirations for NYMEX November RBOB and ULSD futures and the ICE December Brent contract.

NYMEX November RBOB futures expired down 1.96 cents at $1.4495 gallon, paring a decline to a $1.4308 gallon one-month low on the spot continuation chart, and eased 3.79 cents from the end of September. Nearest delivered RBOB futures traded in a 10.0 cents range in October, from an Oct. 21 $1.5370 gallon high to today's $1.4308 low.

December RBOB futures settled down 3.54 cents to $1.4195 gallon, with the calendar spreads widening through January 2017 delivery in the contango market.

NYMEX November ULSD futures expired a steep 4.67 cents lower at $1.4955 gallon, the lowest settlement and the first below $1.50 gallon on the spot continuation chart since Sept. 28. Nearest delivered ULSD futures edged 1.43 cents higher since the end of September, and traded in a wide range in October -- from a $1.6264 one-year high on Oct. 10 to today's low. December ULSD futures settled down 5.37 cents at $1.5039 gallon in the contango market.

NYMEX December West Texas Intermediate led the retreat, settling down $1.84 at $46.86per barrel (bbl), edging off a $46.71 one-month low on the spot continuation chart, with nearest delivery trading at a $51.93 15-month high on Oct. 19. WTI futures with nearest delivery fell $1.38 bbl in October.

ICE December Brent crude futures expired down $1.41 at $48.30 bbl, trimming a loss to a $47.98 one-month low on the spot continuation chart, and trading as high as $53.73 on Oct. 10. January Brent crude settled down $2.07 at $48.61 bbl.

Brian L. Milne can be reached at brian.milne@dtn.com


Brian Milne