DBO - U.S. pump prices seen surging as refinery outages cut supply ahead of summer
2024-03-15 18:50:21 ET
- Crude oil closed with slight losses Friday a day after jumping to four-month highs, but prices still posted a ~4% gain for the week, helped by larger than expected drops in U.S. inventories for crude and gasoline, and a stronger demand forecast from the International Energy Agency.
- Continued plans for production cuts from OPEC and its allies as well as Ukrainian drone attacks on Russian energy facilities also supported crude prices this week.
- Front-month Nymex crude ( CL1:COM ) for April delivery fell 0.2% on Friday but ended +3.8% for the week at $81.04/bbl, and front-month May Brent crude ( CO1:COM ) closed down 0.1% on Friday but +3.9% for the week to $85.34/bbl, with both benchmarks ending the week at their second highest settlement values YTD.
- Rising demand from U.S. refiners completing planned overhauls boosted front-month Nymex RBOB gasoline +7.6% on the week to $2.72/gal, its best settlement since September 14.
- U.S. natural gas ( NG1:COM ) posted its sixth weekly loss out of seven, with front-month April Nymex gas down 4.9% on Friday and -8.3% on the week at $1.655/MMbtu.
- ETFs: ( NYSEARCA: USO ), ( BNO ), ( UCO ), ( SCO ), ( USL ), ( DBO ), ( DRIP ), ( GUSH ), ( NRGU ), ( USOI ), ( UNG ), ( BOIL ), ( KOLD ), ( UNL ), ( FCG )
- Analysts say U.S. motorists should brace for gasoline prices to turn sharply higher in the coming weeks, with the national average price at the pump rising more than 9% YTD to ~$3.40/gal since March 8, the highest since early November, AAA reported.
- U.S. gasoline stockpiles fell by 5.7M barrels to 234.1M barrels in the week to March 8, government sata showed this week, and are now trailing their five-year seasonal average by more than 2%.
- Total U.S. refinery utilization rates have remained below 87% for eight straight weeks, the longest such stretch in three years, and research firm IIR Energy calculates that ~1.2M bbl/day of the 18M bbl/day in U.S. capacity are offline this week, and forecasts 885K bbl/day will be down next week.
- The oil and gas stock sector, as represented by the Energy Select Sector SPDR ETF ( XLE ), ended the week +3.8% .