DTN Oil Update
Oil Futures Mixed, Colonial Pipeline Shuts Line 1
HOUSTON (DTN) -- Oil futures were mixed on Tuesday despite supply tightness concerns as U.S. crude stocks were expected to continue declining and global oil supply availability is anticipated to be tight due to stricter sanctions on Russian crude.
The front-month NYMEX WTI futures contract fell by $1.29 to $77.53 bbl, while March ICE Brent futures contract dropped by $1.03 to $79.98 bbl. The front-month ULSD futures contract edged down by $0.0068 to $2.5265 gallon.
In the opposite direction February RBOB futures contract rose by $0.0049 to 2.0013 gallon.
Retail gasoline prices for this year and next are expected to be below 2024's levels, reflecting the forecast for lower crude oil prices, the Energy Information Administration said in its Short-Term Energy Outlook released Tuesday.
The EIA expects U.S. retail gasoline prices will average $3.20 gallon this year, down from $3.30 gallon in 2020 while the 2026 price is forecast to average $3.00 gallon.
Separately, the EIA reported that the national average for retail regular gasoline eased 0.4cts to $3.043 gallon as of Monday, Jan. 13, 1.5cts lower than the same week in 2024. Prices were mixed across the major PADDs for the week, ranging from a loss of 3.9cts to a gain of 1.7cts.
High inventory supplies of gasoline and weak buying interest have been reported in recent weeks.
However, RBOB future contracts for February, March and April shipments continued their upward trend seen in the last trading sessions, driven in part for supply tightness concerns.
According to market sources, the Colonial Pipeline has temporarily shut down its Line 1 gasoline line in Georgia to investigate a potential leak. The 5,500-mile pipeline system begins in Houston, Texas and terminates in Linden, New Jersey.
Colonial's Line 1 transports about 1.5 million bpd of gasoline while Line 2 daily transporting about 1.0 million barrels of distillates -- diesel fuel, jet fuel for commercial aviation, home heating oil and fuels for the U.S. military.
Oil crude futures were bearish Tuesday despite a weaker U.S. Dollar Index, which dropped by 0.71% to 109.105 against a basket of foreign currencies.
On Wednesday, market participants will focus on the release of the U.S. Consumer Price Index for December, which the market consensus anticipates being steady at 0.3% from November.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com