OIL FUTURES: Nymex Crude Continues To Outperform Brent – December 23rd. WSJ

Published on 23 December 2011 by cwhornsby in Hornsby Energy Trading

LONDON (Dow Jones)–Crude-oil futures were mixed Friday, trading in a narrow range, but analysts said they may easily swing up or down in the next few sessions in the thin holiday trade.

“Given low volumes and the potential interest to mark the end-of-the-year price level, it is going to be difficult to interpret the fundamentals according to the flat price movements over the next five trading days,” Olivier Jakob, managing director of Swiss consultancy Petromatrix, said in a note.

“Given low volumes and the potential interest to mark the end-of-the-year price level, it is going to be difficult to interpret the fundamentals according to the flat price movements over the next five trading days,” Olivier Jakob, managing director of Swiss consultancy Petromatrix, said in a note.

At 1113 GMT, the front-month February Brent contract on London’s ICE futures exchange was 11 cents, or 0.1%, down at $107.78 a barrel. The front-month February contract on the New York Mercantile Exchange was trading up 27c, or 0.3%, at $99.80 per barrel.

At 1113 GMT, the front-month February Brent contract on London’s ICE futures exchange was 11 cents, or 0.1%, down at $107.78 a barrel. The front-month February contract on the New York Mercantile Exchange was trading up 27c, or 0.3%, at $99.80 per barrel.

Nymex crude continues to outperform Brent following a string of upbeat U.S. macro-economic news this week.

Nymex crude continues to outperform Brent following a string of upbeat U.S. macro-economic news this week.

“WTI continues to attack the resistance of $100.00 a barrel, even though using the word ‘attack’ might be a bit strong when volume are so low,” Jakob said.

“WTI continues to attack the resistance of $100.00 a barrel, even though using the word ‘attack’ might be a bit strong when volume are so low,” Jakob said.

But it is surprising that Brent has shown a much more modest growth than Nymex crude, given Thursday’s bombings in Iraq and media reports that Iran plans to launch a 10-day naval drill in the Strait of Hormuz Saturday, said the Schork Report.

But it is surprising that Brent has shown a much more modest growth than Nymex crude, given Thursday’s bombings in Iraq and media reports that Iran plans to launch a 10-day naval drill in the Strait of Hormuz Saturday, said the Schork Report.

“Keep in mind that WTI is priced at Cushing, Oklahoma, a landlocked hub very, very far from Iraq–thus the ARA [Europe's key oil] hub should be more sensitive to [Middle East] turmoil, not less,” it added.

“Keep in mind that WTI is priced at Cushing, Oklahoma, a landlocked hub very, very far from Iraq–thus the ARA [Europe's key oil] hub should be more sensitive to [Middle East] turmoil, not less,” it added.

The Brent/WTI spread has narrowed to below $8 a barrel, and it is unlikely to widen over $10 a barrel into 2012 as the supply side situation is normalizing for Brent with the return of Libyan oil, while the U.S. Midwest oil glut is dissipating, said VTB Capital’s Andrey Kryuchenkov.

The Brent/WTI spread has narrowed to below $8 a barrel, and it is unlikely to widen over $10 a barrel into 2012 as the supply side situation is normalizing for Brent with the return of Libyan oil, while the U.S. Midwest oil glut is dissipating, said VTB Capital’s Andrey Kryuchenkov.

At 1113 GMT, the ICE’s gasoil contract for January delivery was up 25 cents at $919.75 per metric ton, while Nymex gasoline for January delivery was 13 points lower at $2.6385 per gallon.

At 1113 GMT, the ICE’s gasoil contract for January delivery was up 25 cents at $919.75 per metric ton, while Nymex gasoline for January delivery was 13 points lower at $2.6385 per gallon.