Momentum Sustains in Oil Futures as Diesel Strengthens Amid Mixed Market Signals

Traders continued to scoop up oil futures after a market comeback on Monday, but by midday Tuesday, some resistance emerged as the NYMEX March West Texas Intermediate (WTI) crude oil contract inched closer to $74 per barrel, and its global counterpart, Brent crude, neared $79 per barrel. Despite a slight retreat from morning peaks, buyers remained cautious, contemplating their next moves carefully in a volatile market landscape.

Oil Prices Buoyed by External Factors

The oil market found support from geopolitical tensions as Houthi rebels announced more attacks around the Red Sea, contributing to price volatility. The weakening of the U.S. dollar, reversing its previous strengthening trend, provided an additional boost to oil prices. March WTI briefly touched $73.74 per barrel before settling around $73.63 per barrel as of late morning, notably higher than the previous day's low. April Brent followed suit, standing 91 cents higher at $78.90 per barrel, shy by only a few cents from its morning high.

Refined Products Take a Pause; Diesel Gains

Refined product prices showed some hesitancy after the lift gained on Monday, signaling market participants taking stock of recent developments. Nonetheless, NYMEX Ultra Low Sulfur Diesel (ULSD) futures bucked the trend, climbing over 3 cents, possibly influenced by attacks on Russian refineries. ULSD futures hovered around $2.76 per gallon, with the front-month contract up approximately 3.5 cents to $2.7604 per gallon, just below the morning's peak level.

The gasoline market saw modest gains in the near term, but the most significant advances appeared in future contracts, particularly for low-Reid Vapor Pressure (RVP) gasoline, causing the spread between March and April to widen significantly to nearly 23 cents.

U.S. spot markets also reflected this upward trend, with Chicago spot Conventional Blendstock for Oxygenate Blending (CBOB) strengthening relative to futures while narrowing its discount to the March RBOB contract by 5 cents. Regional dynamics seem to be playing a role as prices have been climbing steadily over the past few trading sessions.

Oil, Futures, Diesel