Oil Futures Firm in Limited Trade

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

CRANBURY, N.J. (DTN) -- Oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange mostly edged higher Monday with the RBOB contract softening in limited trading ahead of Tuesday's truncated session in front of Christmas Day when the exchanges will be closed.

Both crude contracts held to inside trade sessions and near three-month highs Monday, with NYMEX February West Texas Intermediate settling up $0.08 at $60.52 per barrel (bbl) and ICE February Brent ending the session $0.25 higher at $66.39 bbl. Brent's premium to WTI widened to a fresh three-week high at $5.87 bbl.

NYMEX January ULSD futures settled flat, up four points at $2.0222 with the February contract ending at near parity with January delivery at $2.0221 gallon. NYMEX January RBOB futures softened seven points to a $1.7051 gallon settlement, with the February contract ending at a 14-point premium to January delivery.

U.S. equity indices reset record highs today, with the Dow Jones Industrial Average up more than 100 points late afternoon near 28,570 and the S&P 500 Index near 3,226. The U.S. dollar reversed down from a more than one-week high to settle slightly lower at 97.235 in index trading.

Weak sales for durable goods in November were offset by data from the Federal Reserve Bank of Chicago showing a rebound in economic growth for last month. After a decline to -0.76 in October, the Chicago Fed National Activity Index increased to 0.56 in November, with the four broad categories used by the index moving higher last month.

The broad-based index countered an unexpected 2% decline in durable goods order in November reported by the Commerce Department while October's reading was revised down from 0.6% to 0.2%

In addition to mostly strong U.S. data, especially domestic employment with the unemployment rate holding at a 50-year low, an improving economic outlook in December follows the de-escalation in the U.S.-China trade dispute that had clouded growth expectations in 2019. Following the phase one trade agreement reached between Washington and Beijing, China's Ministry of Finance said it would reduce tariffs on more than 850 goods and over 8,000 products for 23 countries that have free-trade agreements with China effective Jan. 1.

The ruling doesn't include U.S. imports, but is seen limiting complaints from other nations following the U.S.-China Phase One trade agreement. The decision is another factor suggesting Beijing will honor the phase one agreement, while the lower tariffs for 23 countries are seen boosting global trade flow that supports economic growth. The Energy Information Administration will delay its weekly report on supply changes to U.S. crude and oil products to 11 a.m. ET Friday because of the Christmas holiday.

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


Brian Milne