DTN Oil Update
Crude Oil Futures Rose Driven by Demand, Weak USD
HOUSTON (DTN) -- The front-month NYMEX WTI and the February ICE Brent futures contract prices rose Tuesday morning, on expectations of high demand due to severe cold weather and a weaker U.S. dollar.
The U.S. Dollar Index continued trending lower against a basket of foreign currencies as it fell by 0.061 to 108.045. The weakening of the U.S. dollar is attributed to the transition to a new administration on Jan. 20, when President-elect Donald Trump will be sworn in for a second term. Trump has threatened to impose 60% trade tariffs on imports from China, and 25% tariffs on imports from Mexico and Canada, the U.S. main trade partners, which are expected to influence the U.S. dollar.
Additionally, expectations of increasing demand for heating oil due to extreme weather across the U.S. caused by a polar vortex put upward pressure on the two oil benchmarks Tuesday morning.
Downstream, however, RBOB futures contract for February delivery fell Tuesday morning, despite the Energy Information Administration (EIA) reporting a price hike on gasoline during the last week.
The national average for retail regular gasoline moved off the lowest level since early May 2021, rising 4.1cts to $3.047 gallon as of Monday, Jan. 6, an eight-week high. The price was 2.6cts below the level recorded in the same week of last year.
In 2024, the U.S. retail price for regular grade gasoline averaged $3.30 per gallon, $0.21/gal less than in 2023, the EIA reported Tuesday. The drop was attributed to lower crude oil prices andâ?¯ https://www.eia.gov/… in 2024 compared to the previous year.
The U.S. average on-highway diesel fuel price rose for a second week, jumping 5.8cts to a 10-week high $3.561 gallon as of Monday, Jan. 6. The price point was 26.7cts lower year-over-year, the EIA data showed.
Separately, Saudi Aramco increased the Official Selling Price for all its February extra light crude shipments. The steepest hike was for North America at plus $5.75 bbl, followed by Europe at plus $1.65 bbl and East Asia at plus $1.50 bbl.
From January to October of 2024, U.S. refiners imported 108 million bbl of Saudi Arabian crude, which was below 140 million bbl imported in the same period of 2023, according to EIA's most recent data.
The NYMEX WTI futures contract for February delivery rose by $0.33 to $73.89 bbl and the February ICE Brent futures contract edged up by $0.47 to $76.77 bbl. The front-month RBOB futures contract fell by $0.0052 to $2.0303 gallon while the ULSD futures contract for February shipments rose by $0.0022 to $2.3574 gallon.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
