DTN Oil

WASHINGTON (DTN) -- Following an explosive rally on Monday, West Texas Intermediate June futures rolled off the board at a 10-week high on the spot continuous chart in quiet trade Tuesday. RBOB and ULSD futures moved mixed in sync with broader markets as investors look to weekly inventory and U.S. unemployment data for fresh clues on the demand recovery.

After back-and-forth trade for most of the session, the WTI contract for June delivery expired at $32.50 per barrel (bbl), with only 19,099 contracts traded. The new front-month July contract settled at $31.96 bbl with 406,568 contracts traded, down 28% from Monday, albeit trading in the July contract will continue until 5 p.m. EDT.

International Brent crude benchmark for July delivery settled down $0.16 at $34.65 bbl, reversing off a $35.76 six-week high on the spot continuous chart. NYMEX June ULSD futures dropped back 3.28 cents to $0.9736 a gallon, retreating from Monday's five-week spot high $1.0286 gallon. NYMEX June RBOB contract was up 1.94 cents to settle near a nine-week spot high $1.0452 gallon.

Tuesday's session was smooth and uneventful compared to last month's dramatic plunge to a negative $37.63 bbl by the May WTI contract on April 20, expiring a day later at $10.01 bbl. Since then, U.S. producers have throttled back production nearly twice as much as forecast at the time, cutting a record 800,000 barrels per day (bpd) to 11.6 million bpd as of May 8. EIA's latest drilling productivity report projects crude production from seven major shale formations in the United States to fall by another 197,000 bpd in June to 7.822 million bpd, a downward revision of 704,000 bpd.

Stocks on Wall Street closed the session little changed after an explosive rally Monday that sent Dow Jones Industrial futures souring 910 points and S&P 500 up 3.5%. U.S. investment bank Citi Group forecasts the two indexes would recoup 81% and 90% of their losses suffered from February's record peaks in as little as 15 months. However, massive 36 million job losses over the past eight weeks remain a major stumbling block on the path toward economic recovery. U.S. Treasury Secretary Steven Mnuchin warned during his Congressional testimony on Tuesday the jobless numbers would get worse before they get better, projecting a very difficult month ahead.

"The number one objective is to keep people employed," said Mnuchin.

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

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