SlavkoSereda/iStock via Getty Images
Crude oil futures ended Tuesday with back-to-back losses, attributed in part to expectations the Federal Reserve will maintain high interest rates for an extended stretch as the central bank awaits renewed progress on lowering inflation.
Despite the run-up to this weekend’s Memorial Day holiday, retail gasoline prices fell for the fourth straight week to $3.58/gal on Monday, the Energy Information Administration said in its gasoline and diesel fuel update.
In an effort to ensure sufficient supply flows to the northeastern U.S., the Department of Energy announced plans to sell the nearly 1M barrels of gasoline from the Northeast Gasoline Supply Reserve, which is due to be closed in line with a law Congress passed in March.
The reserve was authorized in 2014, two years after Hurricane Sandy damaged refineries and left some gas stations in New York without fuel for, but the cache, kept in commercial storage terminals in Maine and New Jersey, has never been used.
While the Biden administration said the move would lower prices at the pump, Bloomberg reported the 1M-barrel sale likely would not make a significant difference in the East Coast region, which burned through more than 3M bbl/day of gasoline in June last year.
Front-month Nymex crude (CL1:COM) for June delivery closed -0.7% to $79.26/bbl, and front-month July Brent crude (CO1:COM) finished -1% to $82.88/bbl.
Also, front-month Nymex natural gas (NG1:COM) for June delivery ended -2.9% to $2.671/MBtu, pulling back from a four-month high and snapping a four-session winning streak.
ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI), (UNG), (BOIL), (KOLD), (UNL), (FCG)
Goldman Sachs’ analysts made no change to their Brent crude price targets, sticking to an earlier projection that Brent will generally trade below $90/bbl this year, but said they are “mildly bullish” on oil prices ahead of the OPEC+ meeting on June 1.
Perhaps the most bullish element in the report, according to Dow Jones, is light long positioning in the crude market, with Goldman saying long positions among money managers are at new lows, leaving room for a bullish “mean-reversion” that suggests positioning will return to historical norms over time.
Source link
