Oil Finishes Lower Ahead of RBOB Contract's Expiration
U.S. crude oil futures ended lower Thursday in gasoline-led profit-taking ahead of the RBOB September contract's expiration on Friday.
Late short-covering reduced losses, as traders weighed government storm trackers' word that a tropical depression could form soon in the Atlantic.
Prices had seesawed through most of the day after surging 2.5 percent Wednesday on government weekly data showing sharp drops in crude and gasoline inventories.
On the New York Mercantile Exchange, October crude last traded 11 cents or 0.2 percent lower at $73.40 a barrel, moving from $72.75 to $73.96.
In London, October Brent dropped 25 cents or 0.3 percent to $71.88 a barrel, trading $71.37 to $72.47.
"The only thing that's substantial in market today is that traders are squaring books on September RBOB and after we're done with that, I expect we're going back up again," said Tom Knight, trader at Truman Arnold in Texarkana, Texas.
In New York, NYMEX September RBOB gasoline last traded down 1.08 cents or 0.5 percent at $2.0260 a gallon, trading $2.0369 to $2.1150.
Before the day's loss, September RBOB had risen almost 24 cents or 13 percent, rising five times in the last six trading sessions to $2.1008 on Wednesday.
"Crude rose sharply on the large gasoline draw on Wednesday, but market knows we are heading out of the gasoline season, so we're seeing a sell-off here," said Amanda Kurzendoerfer, commodity analyst at Summit Energy in Louisville, Ky.
NYMEX September heating oil fell 1.50 cents or 0.8 percent, to $2.0260 a gallon, trading from $2.0220 to $2.0520.
Ahead of the long Labor Day holiday weekend, Nauman Barakat, senior vice president at Macquarie Futures USA, said traders were weighing their positions ahead of Federal Reserve Chairman Ben Bernanke's scheduled speech on Friday before global policy-makers at the annual monetary conference in Jackson Hole, Wyo.
Crude oil futures jumped on Wednesday after U.S. government inventory data showed crude stocks fell 3.5 million barrels to 333.6 million barrels in the week to Aug. 24, as imports dropped due to storm-related delivery delays and refinery troubles caused reduced run rates.
Gasoline stocks dropped by a larger than expected 3.6 million barrels, to 192.6 million barrels, lowest since the week of Sept. 9, 2005.
The low level of gasoline stocks has triggered booking of prompt cargoes from Europe to the U.S., with at least five 36,500-37,000 tonne vessels carrying gasoline having been booked on Thursday, traders and brokers said.
A tropical wave in the central Atlantic Ocean was a little better-defined early Thursday and could become the sixth tropical depression of the season in the next day or two, the U.S. National Hurricane Center said in its morning advisory.
Energy traders were keeping a close eye on the tropical wave ahead of the long holiday weekend amid fears a stronger storm could develop in warmer Caribbean waters and possibly threaten U.S. Gulf of Mexico oil and natural gas production.
Midwest refineries are planning a heavy maintenance slate this autumn, according to a Reuters survey. On Wall Street, technology shares led an advance, as traders bet that business spending will support the sector's profits even as the housing slump hampers growth in other parts of the economy.
Meanwhile, OPEC oil exports, excluding Angola, will jump 580,000 barrels per day (bpd) in the four weeks to to Sept. 15, mostly on Western oil demand, analyst Roy Mason of consultancy Oil Movements said on Thursday.