MARKET WRAP -9 / Crude Oil Weekend Scenario-News
Column Content Index
12/11 16:45 U.S. cash crude cek closes bearish week quietly
12/11 17:10 North Sea Brent - January gains two cents in U.S.
12/11 17:14 U.S. foreign crude - Sweets remain under pressure
12/11 17:21 U.S. Cash Prods-USG diffs soften as buyers abstain
12/11 21:30 U.S. West Coast ANS pure prices rise, diffs flat
12/11 16:45 U.S. cash crude closes bearish week quietly
NEW YORK, Dec 11 - The U.S. cash crude oil market barely budged in thin trade Friday, closing out a week in which prices fell to lows not witnessed in 12 years.
The cash crude market slowed to a near standstill Friday with a number of traders attending an industry event in New Orleans. That left prices largely dictated by the January New York Mercantile Exchange futures contract, which settled seven cents higher at $10.79 a barrel.
Given an exchange for physical premium of between three and five cents, slightly stronger futures helped push benchmark West Texas Intermediate/Cushing prices to between $10.80 and $10.85 a barrel.
But differentials for individual grades against the benchmark were essentially unchanged Friday, traders said.
Nevertheless, most cash crude prices remain within striking distance of the 12-year lows they hit Thursday amid persistent concerns about swollen stocks.
Even recent tensions between the U.S. and Iraq over United Nations arms inspectors have done little to pull the crude market out of the basement.
The only deals reported on Friday in the cash crude market were for WTI/Cushing postings plus at $2.07 and $2.06 (down two cents); West Texas Intermediate/Midland at -32 cents (unchanged); and West Texas Sour/Midland at -$1.36 (down four cents).
Otherwise, Light Louisiana Sweet/St. James was assessed at between seven and three cents under the benchmark, while Heavy Louisiana Sweet/Empire was pegged at minus 20/15 cents a barrel.
Offshore Eugene Island was discussed all day at about $1.10 below WTI/Cushing.
12/11 17:10 North Sea Brent - January gains two cents in U.S.
NEW YORK, Dec 11 - North Sea Brent was mixed in late trading on Friday, as traders said January Brent gained two cents, but February Brent slipped a penny.
January Brent was valued at $9.84 a barrel, up from its close at $9.82 earlier Friday on the International Petroleum Exchange.
February Brent was valued at $10.05 a barrel in the U.S., down from its IPE close at $10.06, traders said.
The only deal involving January cash Brent partial cargoes was for a 400 lot piece sold at $9.84.
Other deals included a full cargo of February cash Brent, as well as 100 lots of February cash partials both done at $10.05.
The Brent January-February spread traded twice at minus 27 cents and once at minus 28 cents, traders said.
12/11 17:14 U.S. foreign crude - Sweets remain under pressure
NEW YORK, Dec 11 - The U.S. crude market for imported grades remained mostly steady on Friday, but sweet crudes stayed under pressure, with talk of weaker prices for West African and Colombian grades, traders said.
Crude oil futures on the New York Mercantile Exchange ended the day seven cents higher, but that left the front-month January contract below the $11.00 level at $10.79 a barrel. The last time NYMEX crude oil was this weak was in July 1986, when it slipped to $10.65 in a middle of a price war among OPEC members.
LATAM - COLOMBIA, VENEZUELA, ECUADOR, CHILE
-- Details remained scarce on this week's sell-tenders of Ecopetrol's sweet Cusiana crude, with no confirmation of talk that the four cargoes were awarded at a discount around $1.45 under West Texas Intermediate, or 10-20 cents weaker than last week's tenders. Most traders had expected Colombia's main grade to remain steady, around $1.30-1.25 under WTI.
-- Last week's tender for a January 4-8 loading cargo of medium-heavy Vasconia was said to have been awarded by Colombia's state-owned Ecopetrol at a discount of $2.87 under WTI, little changed from a previous deal for a December cargo at minus $2.85.
Bids were due this week on another cargo of Vasconia, this time loading January 9-13, but details on the deal were still unavailable.
-- Colombia's medium-heavy Cano Limon remains difficult to put a price on, and details of Ecopetrol's December 31-January 6 loading cargo, for which bids were due last week, are still not available in the market. Cano was valued in a very wide range, between $2.80 and $2.45 under WTI.
The lower end of the range puts Cano virtually at parity with Vasconia, which traders attribute mostly to the severe disruptions in Cano production this year. Loadings are said to be delayed by as much as a week, in a year when guerrilla bombings which totaled an unprecedented 74 attacks.
But traders also said that competition from other foreign grades, notably Iraqi Basrah Light was also keeping the pressure on Cano Limon.
-- Venezuela's sour crude, Mesa/Furrial remained valued around $2.80-2.70 under WTI, and traders said a cargo of the grade had sold at minus $2.78 this week.
-- Ecuador's sour crude Oriente remained valued around the $3.00 level below U.S. benchmark WTI, traders said. There is still little news from Ecuador about several term cargoes for Oriente that are scheduled to expire at the end of this year, traders said. Last week, the heads of state-owned Petroecuador and Ecuador's
-- Traders also said they were waiting for news of Chilean state-owned oil company ENAP's buy-tender for a million barrels of crude, for delivery in mid-January. Bids were due last week. In the past, Chile has bought Ecuadorean Oriente, Nigerian Forcados and Malaysian Tapis to fill its buy-tender.
IRAQI
-- Iraqi sour crude, Basrah Light was said to be on offer at around $2.50 under WTI on a delivered basis, traders said.
NORTH SEA, WEST AFRICAN
-- The January West Texas Intermediate-North Sea Brent arbitrage narrowed further on Friday, settling below the one dollar level at 97 cents.
With the trans-Atlantic arb too narrow to provide much incentive for imports of North Sea grades into the U.S., talk was mostly thin on European grades, traders said.
-- West African differentials are under growing pressure, and traders said Nigerian Bonny Light was especially weak in the U.S. Gulf. The grade was on offer at February WTI minus 50 cents, about 10 cents weaker than last week.
12/11 17:21 U.S. Cash Prods-USG diffs soften as buyers abstain
NEW YORK, Dec 11 - Gulf Coast hub differentials slipped back to where they began the day after briefly tightening in the morning, traders said.
Gulf jet fuel Friday afternoon weakened on scheduling later in the day by about 0.60 cent after initial scrambling for product later turned into a dumping, traders said.
In the New York Harbor slightly colder weather and a lack of imports coming to the hub boosted confidence most differentials gained slightly.
Deals were thin all around traders said. "Jet is pretty much all I'm seeing today, that and a little low sulphur and a little heating oil," said one Gulf trader.
NYMEX crude oil futures traded slightly higher, on pre-weekend shortcovering, after threatening to bust a new 12-year low in early trade.
January crude closed seven cents higher at $10.79 per barrel, after Thursday's 44 cent sinkhole.
But cracks widened on what traders said was purely technical gains as the products gained somewhat faster. January heating oil closed up 0.15 cent at 31.50 cent per gallon and front month gasoline rising 0.34 cent to 34.34 cents a gallon.
GULF COAST
Jet fuel, after trading at progressively higher differentials, in the morning, softened on scheduling back to where it was at the beginning of the trading day.
Jet traded as high as 1.10 discount to the January heating oil screen, before scheduling knocked it down to 1.90/1.50 under the screen.
Low sulphur traded as high at 1.50 discount to the screen before being assessed at 2.00/1.75 cents discount.
"Many players were left holding, and when it looked like that was happening, things started to dive," said one Gulf trader.
Heating oil traded on the firm side of its range at 3 cents under the screen.
Gasoline M5 slipped about 0.25 cent to 5.25/5.00 cents under the screen in thin trade.
Premium conventional V-grade gasoline held gains since refiners have stopped producing the grade amid bad economics, its regrade over the M-grade has nearly doubled to 3.00/3.25 cents.
NEW YORK HARBOR
Cooler weather and fewer imports coming to the hub boosted heating oil and conventional gasoline differentials, traders said.
Heating oil was traded 0.40 cent higher at 1.05 discount to the screen.
"A bit of cool weather helped, and everyone is satisfied with what they have," said one Harbor trader.
Jet fuel firmed about 0.50 cent to 0.75/1.00 cent over the January screen, as a lone deal was heard done much firmer, while trade was mixed on the rest of the products, traders said.
Low sulphur diesel was quiet, holding losses on continuing containment concerns, after the Colonial Pipeline's decision earlier in the week to repoen the prompt distillates line, traders said.
Conventional M-5 grade gasoline gained slightly, in thin trade pegged at 4.75/4.50 discount to the screen.
Regular premium V-grade was also steady, pegged at 4.30/3.85 cents discount.
MIDCONTINENT
Chicago gasoline slipped about 0.20 cent to 4.00/3.75 cent under the print while low sulphur diesel differentials rose to 0.30 cent under to flat to the print.
Gasoline in the Group traded up to 4.00 cents discount, premium was pegged at a 2.65 cents regrade and low sulphur diesel at flat to the screen.
12/11 21:30 U.S. West Coast ANS pure prices rise, diffs flat
LOS ANGELES, Dec 11 - Outright prices for U.S. West Coast light crudes edged up Friday while differentials were steady in a quiet spot market, traders said.
The last reported deal occurred December 3, when a cargo of benchmark Alaska North Slope (ANS) sold for $2.10 a barrel under January West Texas Intermediate (WTI).
ANS markets have been driven lower by steady production, falling refinery demand, and broadly lower oil markets, traders said.
Few deals were expected soon, with traders trying to reduce inventories and producers wary of selling into a weak market.
Some buyers said West Coast demand for spot ANS would be thin for January, especially since a key buyer -- Equilon's Washington State refinery -- was unable to take its usual two to three cargoes of ANS after an explosion cut plant capacity.
BP Oil, the leading seller of ANS, offered cargoes for $1.40 a barrel under WTI this week.
Outright prices for January ANS on the West Coast made slight gains to end around $8.67/8.84 a barrel on Friday, compared with $8.64/8.80. Outright prices for California heavy grades eased Friday after Texaco lowered postings to match recent declines in WTI prices.
Pure Kern River prices eased to $6.35/6.45 a barrel, while Wilmington oil fell to $7.09/7.19 . |
