DTN Oil

CRANBURY, N.J. (DTN) -- Oil products futures on the New York Mercantile Exchange nearest delivery fell to fresh lows and the U.S. and international crude benchmarks lost on either side of $1 a barrel (bbl) on Tuesday. This followed a sharper-than-expected increase in inflation at the wholesale level in April, with inflation pressure having soured sentiment of consumers and small businesses in the second quarter that is undermining fuel demand.

The Bureau of Labor Statistics (BLS) early Tuesday reported a 0.5% monthly increase in the Producer Price Index for final demand for April, with the wholesale inflation indicator gaining primarily on a 0.6% hike in final demand for services.

"Cost pressures remain the top issue for small business owners, including historically high levels of owners raising compensation to keep and attract employees," said Bill Dunkelberg, chief economist for the National Federation of Independent Business, on Tuesday morning. "Overall, small business owners remain historically very pessimistic as they continue to navigate these challenges."

BLS will release its Consumer Price Index for April on Wednesday morning, with the market expecting monthly and year-on-year readings to have ticked down last month to a 0.3% and 3.4% increase, respectively.

In its initial reading on consumer sentiment for May which grew more pessimistic, the University of Michigan said consumers worried about inflation, high interest rates and unemployment. Typically, these concerns prompt consumers to pull back discretionary spending and driving demand. The U.S. Census Bureau will release retail sales data on Wednesday morning with consumer sales growth expected to have slowed from a robust 0.7% monthly rate in March to 0.4% in April.

June RBOB futures fell to a fresh 15-week low on the spot continuous chart of $2.4517 gallon, holding above the $2.4541 100-day moving average on the session with a $ 2.4596-gallon settlement, down $0.0509.

For ULSD futures, the front month contract slumped to a better than 10 1/2 month low at $2.4014 gallon, settling Tuesday's session down $0.0168 at $2.42 gallon. Key support is found at the $2.3715 trendline for the downtrend from the $5.8595 April 2022 high.

June West Texas Intermediate futures settled below the 100-day moving average, now at $78.50 bbl, for the second time this week with settlement at $78.02 bbl, down $1.10. July Brent futures ended trade Tuesday $0.98 lower at $82.38 bbl.

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