DTN Oil Update
Oil Futures Up on Rising Fuel Prices and Aramco's OSPs Hike
HOUSTON (DTN) -- The NYMEX WTI futures contract for February delivery and front-month ICE Brent futures contract settled higher on Tuesday tracking an increase in U.S. fuel prices reported by the Energy Information Administration (EIA) this 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.
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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 yesterday. The price point was 26.7cts lower year-over-year, the EIA data showed.
Except for the front-month RBOB futures contract, oil futures also rose on the day, supported by Saudi Aramco's decision to increase the Official Selling Price for all its extra Arab Light crude for February shipments.
The steepest hike was seen for North America deliveries with a $5.75 bbl premium over the Oman-Dubai benchmark, followed by Europe at plus $1.65 bbl and East Asia at plus $1.50 bbl. The surge in Aramco's OSPs for February is seen as an indication of firm demand in the global markets.
A better-than-expected U.S. ISM Services Index for December also contributed to the optimism about future demand, despite inflationary pressures. Economic activity in theâ?¯services sector expanded for the sixth consecutive month, according to data released by the Institute for Supply Management on Tuesday. The ISM Service index for December was at 54.1 compared to 52.1 in November, above market expectation of 53.4.
The NYMEX WTI futures contract for February delivery rose by $0.83 to $74.39 bbl and the February ICE Brent futures contract increased by $0.87 to $77.17 bbl, reaching a three-month hike. But the front-month RBOB futures contract fell by $0.0039 to $2.0316 gallon while the ULSD futures contract for February shipments rose by $0.0129 to $2.3681 gallon.
Meanwhile, the U.S. Dollar Index reversed Tuesday morning losses to close at 108.395, an increase of 0.294 from Monday, against a basket of foreign currencies, which include the Euro, the Japanese Yen and the Swiss Franc, among others.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
