Oil Posts Moderate Gains Early

BURLINGTON, Vt. (DTN) –- New York Mercantile Exchange June crude oil and spot month RBOB futures were posting moderate gains at the open of formal session trading Thursday, consolidating Wednesday's price surges on the heels of bullish oil fundamentals served up in weekly oil supply data by the U.S. Energy Information Administration.

July Brent crude oil on the Intercontinental Exchange and NYMEX June ULSD futures were drifting lower on light profit taking at press time.

Frontline West Texas Intermediate crude oil futures traded $0.12 higher at $71.26 bbl, having rallied to a $71.89 high during the overnight session that sets the stage for a test of resistance at just over the $73 bbl barrier. ICE July Brent futures were off fractionally printing $77.21 bbl.

July RBOB futures traded 0.67cts higher at the opening bell at $2.1740 gallon and well off a $2.1834 overnight high.

June ULSD futures drifted 0.57cts lower at the formal session open to $2.2123 gallon after posting a $2.2339 gallon overnight high.

“I think the market is at the point where the bull needs to be fed every day, maybe every hour,” said Phil Flynn, senior market analyst with Chicago-based Price Futures Group. “We had news overnight about missiles flying from Syria over the Golan Heights and Israel retaliated. People bought more oil worried it could further escalate. It seems to have calmed down a bit, so their taking profits right now.”

Flynn said traders will be looking closely at the headline flow about continued tensions between Iran and Israel.

“Fundamentally, the market is bullish regardless of the situation in the Middle East, so when the market tends to get ahead of itself it has a tendency to pull back a bit,” he said.

G. Bud deGorgue can be reached at bud.degorgue@dtn.com