WTI Futures Inch Up Friday

WTI Futures Inch Up Friday

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Nearest-delivered West Texas Intermediate and RBOB futures on New York Mercantile Exchange and Brent crude on the Intercontinental Exchange settled higher Friday. The besieged WTI contract found tepid support from another weekly decline in drilling activity due to forced economic cutbacks in production as storage quickly fills amid evaporating fuel demand.

Baker Hughes on Friday reported the U.S. oil rig count fell for the sixth straight week through today, down 60 to 378, the lowest number of rigs seeking oil in the United States since July 2016. Since March 13, producers have taken down 305 rigs.

June WTI futures ended the week up $0.44 at $16.94 per barrel (bbl), while WTI on a spot-month basis shed over 31% in value since last Friday, April 17, although up from Monday's minus $40.32 trade. ICE June Brent futures settled marginally higher at $21.44 bbl, recovering from Thursday's $15.98 21-year low on the spot continuous chart, although down $6.28 or 22% on the week.

May RBOB futures advanced 1.76 cents to settle at $0.6612 gallon, although down over 6% this week even as gasoline demand in the United States flashed signs of recovery during the week ended April 17. Energy Information Administration data showed gasoline demand last week increased 230,000 barrels per day (bpd), although the four-week average through April 17 at 5.529 million bpd is 41.4% below the comparable week a year ago.

The ULSD complex was the exception, settling down a steep 8.78 cents to $0.6467 gallon on the session and marking a staggering 30.96 cents or 32.4% loss on the week. The ULSD contract dropped to a $0.6350 18-year low on the spot continuous chart Friday under pressure from building stocks as diesel demand trends down in the second quarter on contracting manufacturing activity with freight falling off after a pop higher in late March.

Bob Costello, chief economist with American Trucking Associations, called a 1.2% increase in tonnage hauled in March "the storm before the calm," expecting freight to be "very soft" in April.

Distillate fuel supplied to the U.S. market, which is primarily diesel, averaged 3.4 million bpd during the four weeks ended April 17, according to EIA, down 9.8% against year ago. Weakening demand is prompting inventory to build. After drawn down each week in March, distillate supply has increased each week in April so far, up 14.7 million bbl or 12% since the late March.

Liubov Georges can be reached at liubov.georges@dtn.com


Liubov Georges