NYMEX crude oil and refined product futures were trading near their morning highs at midday Tuesday.

Part of the upside was likely due to NYMEX futures making up some lost ground to Brent crude futures, which rose in Monday trading to settle at $83.10/bbl.

The Nymex July West Texas Intermediate contract was up by about $2 to $79.72/bbl near midday, and just 4cts below its morning high.

Over the last week or two, oil and refined product futures have posted strong gains in the first half of the session before losing ground into settlement.

The July Brent contract was on track Tuesday for a third straight day of gains, up about 96cts to $84.06/bbl just ahead of midday.

Oil markets were drawing strength from a slightly weaker dollar and expectations that OPEC and allied producers will extend current production quotas when they meet over the weekend. The meeting has likely led to some "just in case" short covering.

Refined product futures were also higher in morning trading, with distillate futures leading the way.

The Nymex June and July ULSD contracts were each up by about 6cts/gal as the more active July contract was close to moving back above $2.50/gal. The contract hit a morning high of $2.4955/gal.

The gains in ULSD futures lifted U.S. spot distillate prices by a similar amount.

Stronger diesel prices have also put some downward pressure on Renewable Identification Number credits that have lately been showing some strength. Both ethanol and biodiesel RINs were last quoted at or around 56cts/credit.

The June ULSD and RBOB contract expire on Friday. The two contracts were lightly traded Tuesday, with ULSD up 5.96cts at $2.4732/gal, and RBOB 3.29cts higher at $2.5171/gal.

Gains in the July RBOB contract were outpacing those for June, narrowing the backwardation between the two. The July ULSD contract, which reached a morning high of $2.5127/gal, was 3.96cts higher at $2.5092/gal near midday.

Most U.S. spot gasoline markets were up with futures, led by Chicago, where cash gasoline and diesel prices were up by more than 10cts/gal.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

--Reporting by Denton Cinquegrana, dcinquegrana@opisnet.com; Editing by Jeff Barber, jbarber@opisnet.com

(END) Dow Jones Newswires

05-28-24 1258ET