MARKET PREVIEW: NYMEX Oil Futures Dip in Overnight Trade

    

   NEW YORK (DTN) -- New York Mercantile Exchange oil futures dipped during 
overnight trade as traders booked profits after gains in the previous week 
sessions and ahead of a key jobs report due later this morning that's expected 
to show U.S. employers cut more jobs in August. 

   With such a bearish projection, oil traders turned their focus to weak oil 
fundamentals, with high U.S. crude supplies and tepid demand. Midweek data 
showed just a small drawdown for gasoline supplies ahead of the Labor Day 
weekend, which is usually considered the end of the peak U.S. summer driving 
season. 

   The loss of momentum by Hurricane Earl as it landed overnight in the North 
Carolina coast also eased initial fears that a monster storm could impact 
refinery operations in the Mid-Atlantic region, which has a combined refining 
capacity of about 1.2 million bpd.

   Earl has been downgraded to Category 2 strength as it heads upward toward 
the Maryland, Delaware, and the New Jersey coastline, the National Hurricane 
Center said.

   On Wall Street, U.S. stock futures were mixed this morning, with Dow Jones 
Industrial Average and S&P 500 down, putting pressure on oil prices. However, a 
slightly weaker U.S. dollar limited the oil price losses. The dollar index was 
down 0.12 percent.

   At 8:00 AM ET on Friday, October NYMEX WTI crude futures were down 67cts to 
$74.35 bbl, while October Brent futures slipped 44cts to $76.49 bbl on ICE 
Futures. 

   Crude futures traded within a narrow range over the past five sessions, with 
the spot-month NYMEX WTI contract fluctuating within a $4 range and posting 
weekly losses of just 82cts. 

   October WTI/Brent arbitrage expanded to $3 in midweek trade due to excess 
U.S. crude supplies, although the arbitrage shrunk to $2.24 this morning. 
That's more than enough to cover trans-Atlantic shipping costs.

   In products trade, October NYMEX No. 2 heating oil futures slipped 1.32cts 
to $2.0491 gal while October NYMEX RBOB gasoline futures dropped 1.56cts to 
$1.9060 gal. 


NYMEX Globex, 8:00 AM ET

                          Last       Change          High       Low
Oct.   WTI crude          $74.35     dn $0.67        $74.97     $74.31
Nov.   WTI crude          $75.66     dn $0.58        $76.14     $75.64
Oct.   Heating oil        $2.0491    dn 1.32cts      $2.0627    $2.0490
Nov.   Heating oil        $2.0711    dn 1.29cts      $2.0842    $2.0707
Oct.   RBOB futures       $1.9060    dn 1.56cts      $1.9191    $1.9042
Nov.   RBOB futures       $1.9094    dn 1.37cts      $1.9196    $1.9084
ICE Futures, 8:00 AM ET
Oct.   Brent crude        $76.49     dn $0.44        $76.83     $76.35
Nov.   Brent crude        $76.73     dn $0.48        $77.07     $76.64

   EAST OF ROCKIES SPOT PRODUCT MARKETS

   U.S. spot product prices in the New York Harbor and at the Texas Gulf Coast 
rose for the second straight session Thursday, tracking a rally for benchmark 
NYMEX product futures, though cash differentials were mixed.

   Gulf M2 regular gasoline was 1.0cts stronger at a 1.75cts premium over 
October NYMEX RBOB futures that boosted spot prices by 4.25cts to $1.9391 gal. 
Harbor M2 regular gasoline spot prices jumped 2.75cts to $1.9416 gal as cash 
differentials traded 0.5cts weaker at a 2.0cts premium over RBOB futures.

   Gulf ultra-low sulfur diesel traded 0.65cts weaker at a 1.85cts premium over 
October No. 2 oil futures but the spot price rose 1.47cts to $2.0808 gal. 
Harbor ULSD spot price edged up 0.62cts to $2.1323 gal while cash differentials 
traded 1.5cts weaker at a 7.0cts premium to No. 2 futures.


PROJECTED OPENING SPOT PRODUCT PRICES ($/gal) at 8:00 AM ET
N.Y. HARBOR                           GULF COAST
No.2 Oil              $2.0316         No.2 Oil              $2.0041
ULSD                  $2.1191         ULSD                  $2.0676
Jet                   $2.1041         Jet                   $2.0591
Conventional Regular  $1.9258         Conventional Regular  $1.9233
Conventional Premium  $1.9758         Conventional Premium  $2.0233
RBOB                  $1.9233         RBOB                  $1.8958
PBOB                  $2.0083         PBOB                  $2.0058
CBOB 87               $1.9183 CBOB 87               $1.9158
CBOB 93               $1.9558 CBOB 93               $2.0058
                                      CHICAGO
                                      ULSD                  $2.1241
GROUP 3                               Jet                   $2.1091
ULSD                  $2.1216         Conventional Regular  $2.0083
Jet                   $2.1191         Conventional Premium  $2.1583
Conventional Regular  $2.0158         RBOB                  $2.0683
Conventional Premium  $2.0958         PBOB                  $2.1983
                      CBOB 87 $2.0083

   George Orwel, 1.718.522.3969, george.orwel@telventdtn.com, Telvent DTN, 
www.telventdtn.com. (c) 2010 Telvent DTN. All rights reserved.