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COMMENTS
***CASH***
With WTI rising on the NYMEX, the domestic grades re-aligned in value.
LLS started the day trading at WTI plus 85 cents and sold down to plus 72 cents; with late bids retreating further. HLS traded between WTI less 25 and 30 cents. MIDLAND SWEET barrels were sold between 20 and 24 cents discount to Cushing.
The sour grades weakened substantially. WTS traded from WTI less 1.90, out to minus 2.20. MARS started at WTI less 3.80 and sold down to 4.00 discount. SGC barrels were sold between 4.00 and 4.25 discount to Intermediate.
With the Apr-May contango holding steady, CMAs traded between minus 49 and minus 50 cents.
Reports that an ANS cargo for March delivery into the USWC had achieved WTI parity could not be confirmed.
An April cargo also into the West Coast was reported sold at WTI less 1.35.
No cash WTI activity was noted following the strong NYMEX close; with bid/offers for April crude straddling the 80.87 settlement. But, with the market’s bias well to the upside, the value continued to rise during electronic trading and topped out around 81.01 before consolidating either side of 80.85.
***U.S. CLOSE***
| CRUDE | MONTH | BUY | / | SELL | CRUDE | MONTH | BUY | / | SELL |
| WTI | APR | -0.03 | | 0.10 | ANS WC | APR | -1.50 | | -1.30 |
| CMAs | APR | -0.52 | | -0.48 | MARS | APR | -4.10 | | -4.00 |
| MIDLAND | APR | -0.25 | | -0.20 | CUSIANA** | APR | -1.80 | | -1.50 |
| LLS | APR | +0.70 | | +0.80 | BASRAH** | APR | -4.60 | | -3.80 |
| WTS | APR | -2.20 | | -2.00 | | | | | |
| | | | | | | | | | | | |
***NOTE: WTI is valued against the NYMEX settlement. All grade differentials are assessed against cash WTI. **Cusiana and Basrah are assessed against the forward WTI month.
FUTURES
***NYMEX Light Sweet Settlement*** Apr 80.87 (Plus 1.19) May 81.26 (Plus 1.20) Jun 81.64 (Plus 1.20) ***ESTIMATED VOLUME*** 514,986
The euro remained firm overnight in response to reports of a Greek austerity plan and crude prices were rangebound but with a slight upside bias as a result of the API stats. A brief dip drove the Apr WTI contract into negative territory to establish the session’s low at 79.44 (Print less 24 cents). Steady gains lifted the front month to open floor trading at 80.34 (plus 66 cents) but bounced around between 80.10 and 80.40 while waiting for the release of the EIA stats. The much larger than forecast build in crude and gasoline stocks initially sent the Apr contract down to revisit the overnight lows but the dip was short lived. A weak dollar and expectations of increased gasoline and jet fuel demand as the economy improves overshadowed the inventory data and drove the energy complex sharply higher. Apr crude penetrated the previous high and the gains were extended as dips were seen as buying opportunities. In choppy action, the surge topped out at 81.23 (plus 1.55) before the rally slowed down. A small portion of the gains were given back ahead of the closing bell and Apr futures closed at 80.87 (plus 1.19); with the Apr-May contango holding steady.
The inventory and supply data continues to be overshadowed by action in the currency markets. As higher lows are made, the Apr contract is now at 7-weeks highs and by closing above 80.50 suggests that a near term bottom is about to be established; with dips seen as buying opportunities. The year’s high at 83.95 is now within reach and could be tested if the dollar remains weak. No real signal of weakness is in sight.
TECHNICAL OUTLOOK: Thursday, 4 Mar 2010 (Apr WTI)
SUPPORT: **** 78.00/76.51 RESISTANCE: **** 81.74/83.95
