Oil Futures End Mixed Thursday
NEW YORK (DTN) -- Spot-month New York Mercantile Exchange oil futures settled mixed Thursday in thin trade with RBOB futures higher while the West Texas Intermediate and ULSD contracts ended down amid a lack of follow-through from the prior session's rally ahead of the afternoon expiration of April WTI options.
"Petroleum markets have backed off from session highs into negative territory, having seen limited follow-through after Wednesday's price recovery," said Citi Futures analyst Tim Evans, adding that concerns over elevated U.S. inventories and rising domestic production kept the market off balance.
In contrast, the RBOB futures contract was supported by expectations gasoline inventories fell last week and would continue to decline over the next couple of weeks due to seasonal refinery maintenance, said Andy Lipow, president of Lipow Oil Associates in Houston.
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On Wednesday through early Thursday, NYMEX WTI and ULSD rose following bullish data from the Energy Information Administration showing draws from crude and products inventories in the United States during the week-ended March 10. WTI and ULSD futures alongside the Brent contract rebounded from 3-1/2 month lows on their spot continuous charts reached Tuesday on the EIA report.
Analysts said WTI and ULSD futures came under pressure Thursday as traders exercised options ahead of the expiration of the April WTI futures contract Tuesday, March 21.
"It was expiration of options day and WTI gravitated toward $49 strike, but there was minimal volume as people wait for the rollover of the WTI contracts over the next two days and we are waiting for the rig-count report tomorrow," said analyst Phil Flynn at Price Futures.
At settlement, NYMEX April WTI futures were down 11 cents at $48.75 per barrel (bbl), reversing from after a $49.62 bbl four-day high overnight, and ICE May Brent crude futures were near flat, settling down 7 cents at $51.74 bbl.
In arbitrage trade, Brent was holding a $3.00 bbl premium to WTI, little changed from Wednesday.
In products trade, NYMEX April ULSD futures were down 0.81 cent at a $1.5043 gallon settlement and the NYMEX April RBOB futures contract settled up 1.08 cents at $1.5942 gallon.
George Orwel can be reached at george.orwel@dtn.com
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