The 2024 Futures Market: A Reflection of Market Stability Concerns


The first 2024 futures’ session provides a glimpse into the market trends observed throughout 2023. Initially, prices experienced a rally, but these gains eventually succumbed to moderate losses due to concerns about market stability.

Crude Oil Prices

In the February WTI session, prices reached as high as $73.64 per barrel (bbl). However, just before 12:00 p.m. ET, they settled around $70.76/bbl, representing a loss of 89 cents per barrel. This decline was influenced by the strong U.S. Dollar, which exerted downward pressure on all commodities. Furthermore, the tech-heavy NASDAQ experienced significant damage, contributing to the negative sentiment surrounding crude oil.

Brent oil prices followed a similar pattern in the March session. They initially rose to $79.06/bbl but later receded to a low of $75.88/bbl. By midday, March Brent was down by 73 cents, reaching $76.32/bbl.

Refined Products

The performance of refined products was mixed. Unusually cold weather boosted the European market, causing ULSD futures to increase slightly. The February contract rose by 0.85 cents per gallon (gal) to reach $2.5374/gal after peaking at over $2.595/gal earlier in the day.

On the other hand, gasoline prices experienced weakness, as is typical during the least demanding month of the year. Analyzing year-on-year comparisons will be intriguing since gasoline demand barely reached 8 million b/d at the end of 2022. Higher run rates this year could potentially lead to inventory builds before the commencement of a modest winter turnaround season.

By midday, the February RBOB decreased by 0.78 cents/gal to $2.0985/gal. However, it reached as high as $2.1717/gal earlier during the session.

Cash Markets and Gasoline Traders

In the cash markets, most venues experienced declines, except for the Group 3 market, where buying activity pushed prices up by 2.60 cents/gal. One positive aspect for gasoline traders in January is the availability of spot gasoline in various markets at significant discounts. In Chicago, gasoline is being offered at a 41.5 cent/gal discount compared to futures prices. Traders believe that this might limit further losses typically associated with high RVP fire sales.

Reporting by Tom Kloza

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