AMERICAS OIL: WTI Crude Oil continues its rally amidst heightened tensions

February 11 - Americas End-of-Day Oil Summary: WTI Crude Oil continues its rally amidst heightened tensions between Israel and Hamas. The market is also weighing the impact of US tariffs and the risk of sanctions tightening supplies. An expected crude stock build offset gains to some extent.

• Risks to the Gaza ceasefire deal are contributing to increased geopolitical tensions after President Trump demanded that all hostages be released by Saturday, as well as the US tightening sanctions on Iran.
• A tighter supply outlook due to stricter sanctions is supportive as Middle East producers raise prices to customers for March loading, Bloomberg said.
• Industry-based US inventory data is released later today after recent US crude stock builds as Canadian flows rose sharply to beat tariff deadlines.
• Russia’s seaborne crude shipments fall suggesting further signs of disruption after the latest US sanctions announced on Jan. 10, while also impacted by weather, according to Bloomberg vessel tracking.
• A WSJ survey found US crude oil inventories had risen 2.4m bbl in the week to Feb 7 while gasoline stocks were see up 0.8m bbl and distillates were seen down 1.6m bbl. A Reuters survey found respondents expected a crude stock build of 3m bbl, gasolione stock build of 1.4m bbl and distillate stock draw of 1.5m bbl.
• EIA released its February outlook, raising projected US crude production to 13.59m b/d from 13.55m b/d last month. 2026 output is projected to average 13,73m b/d. WTI is expected to average $70.62 this year and $70.62 in 2026. Gasoline is forecast at $2.27/gal and diesel $2.36/gal in 2025.
• Tom Kloza of OPIS predicts retail gasoline prices will rise substantially in CA, NV, AZ, OR and WA after wholesale prices jumped 20-70 cts/gal. Costs are around 50 cts/gal-$1.10/gal above wholesale East of Rockies.
• The NOAA 6–14-day outlook is more supportive for heating demand with below-normal conditions forecast across most of the Northern Tier of the country from the Upper Midwest to New England while milder conditions are only expected in parts of the Southeast and Southwest. Elevated heating demand is likely in northern parts of PADDs 1-3 with decreased demand in the southern half of PADD 1 and a part of PADD 4.
• US cracks were higher as the market digests increasing trade tensions and expectations of a busy maintenance season, with product demand elevated in recent weeks.
• NY Harbor ULSD 1st-2nd month spread widened by 0.42 cts/gal to 61.7 cts/gal vs. Monday’s settlement.
  • WTI Mar futures were up 1.4% at $73.32
  • WTI Apr futures were up 1.5% at $73.12
  • RBOB Mar futures were up 1.2% at $2.15
  • ULSD Mar futures were up 2.7% at $2.52
  • US gasoline crack up 0.9$/bbl at 16.94$/bbl
  • US ULSD crack up 1.8$/bbl at 32.39$/bbl