Petroleum futures were sharply lower at midday Wednesday with plenty of liquidation underway as European traders bid adieu to January.

Brent futures were off by $1.75-$1.90/bbl with the April contract off $1.91/bbl at $80.59/bbl. West Texas Intermediate had even more trouble attracting a bid with March futures down $2.05/bbl at $75.77/bbl.

Some observers believe the only news that could explain the move was a Financial Times story that suggested Iran-backed militias were suspending attacks on U.S. forces.

Energy Information Administration data released Wednesday morning was somewhat neutral for crude. U.S. production rose by 700,000 b/d thanks to the restoration of output in the Permian Basin along with most output in the Bakken. Very low refinery runs may also take a toll and the numbers imply that first-quarter 2024 maintenance is heavier than normal.

RBOB was shaky all morning and winter gasoline is well-supplied in all corners of the U.S., with inventories unwieldy in the Midwest. February RBOB expires Wednesday and it was down 7.37cts/gal at $2.187/gal at midday. The March contract finds more action, but it too slumped by 6.78cts/gal to $2.2290/gal.

All of the spot markets that are trading winter gasoline saw similar losses.

East of the Rockies bulk venues gave up 6-7.5cts/gal. The lone market that moved higher was Southern California where the RVP spec is now 5.99 psi. Prices there were up by more than 7cts/gal, trading at 40cts/gal above CME RBOB.

Diesel prices moved higher thanks to the perception that Europe and the U.S. East Coast have relatively scarce inventories of distillate. Latin American demand from both sources is brisk and U.S. exports could outpace U.S. imports by 1 million b/d through February.

February ULSD was lightly traded on its last day with a midday price of $2.809/gal reflecting a 0.22ct/gal increase. The March contract was up 1.77cts/gal at $2.7943/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 Tom Kloza, tkloza@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com


(END) Dow Jones Newswires

01-31-24 1254ET