Petroleum futures experienced a decline on Monday, with the newly front-month December West Texas Intermediate (WTI) contract leading the way. Despite the lack of major developments in Israel's war with Hamas over the weekend, trading volumes remained relatively light, following a pattern established over the last several sessions.
WTI and Brent Crude Prices
The NYMEX December WTI contract dropped to as low as $86.28 on Monday, resulting in a decrease of $1.55 to $86.53 per barrel by midday. On the other hand, Brent crude fared slightly better, with a decrease of $1.24 to $90.92 per barrel. It is worth noting that both WTI and Brent continue to exhibit backwardation, with the December-January spread above $1 for both types of crude.
Refined Product Futures
While refined product futures also experienced a decline, the decreases were more modest compared to crude prices, which, in turn, provided some support for paper crack spreads.
The NYMEX December contract for refined product futures decreased by 2.98 cents to $2.3438 per gallon, while November RBOB (reformulated blendstock for oxygenate blending) was down 2.86 cents to $2.3252 per gallon. Similarly, the NYMEX December ULSD (ultra-low sulfur diesel) contract decreased by 2.19 cents to $3.0498 per gallon, and November ULSD experienced a slightly larger decrease to $3.1267 per gallon.
U.S. Spot Market Prices
In line with futures prices, spot market prices in the U.S. mostly followed a downward trend. However, the Midwest's Group 3 market exhibited some deviations. Group 3 spot diesel's premiums to the NYMEX narrowed by approximately 20 cents since Friday, although it remains the highest priced market in the country with an 85 cent premium over futures. The Group 3 gasoline market also experienced a cooling effect, with its premium to the NYMEX weakening by 5 cents compared to Friday, resulting in an outright price of approximately $2.35 per gallon.
