Crude oil and refined product futures are seeing weekly gains as tensions in the Middle East continue to affect NYMEX contracts. Oil prices have increased by over $1/bbl, while diesel prices are up by more than 1ct/gal. Gasoline futures, however, are rising cautiously due to concerns about soft winter demand and stable refinery output.
Continued Tensions in the Middle East
The strength in futures on Friday coincides with Secretary of State Antony Blinken’s visit to the Mideast. His goal is to engage with leaders in an attempt to contain the spread of conflict amid Israel’s ongoing battle against Hamas.
Traders are apprehensive about the potential escalation of violence, which has led them to overlook Thursday’s bearish Energy Information Administration report. The report revealed significant build-ups in U.S. diesel and gasoline stocks last week.
Current Futures Performance
As of 11:50 a.m. on Friday, the NYMEX February West Texas Intermediate crude contract is up $1.53 to $73.72/bbl, slightly lower than its morning peak. The March WTI contract has also risen by $1.54 to $73.90/bbl.
March Brent crude has seen an increase of $1.29 to $78.88/bbl, while the April contract has also risen by $1.29 to $78.70/bbl.
Compared to settling prices on December 29, oil prices are now approximately $2/bbl higher.
The NYMEX February ULSD contract is up by 1.91cts to $2.6075/gal, with the March contract experiencing a rise of 2.31cts to $2.5766/gal.
Meanwhile, the NYMEX February RBOB contract has increased by 1.54cts to $2.1255/gal, and the March contract is up by 1.46cts to $2.1497/gal.
Spot Diesel and Gasoline Prices
Spot diesel prices in the U.S. are being influenced by gains in futures, but gasoline prices are showing more varied movements. While California markets have seen declines of over 10cts/gal, the Gulf Coast has experienced an increase of over 3cts/gal.
Overall, RBOB prices are roughly 2.5cts/gal higher compared to settling prices on December 29, while ULSD contracts are on track to end the week with a gain of nearly 7cts/gal.