NYMEX March crude futures settled 93 cents lower at $96.91/barrel Monday, but heating oil and gasoil futures made gains as cold weather moves across Europe.
March heating oil settled 5.63 cents higher at $3.1707/gal on NYMEX, while ICE February gasoil settled up $28.75 at $988.25/mt. In post-settlement trade, gasoil gained $30 to $989.80/mt.
NYMEX March RBOB settled 1.35 cents higher at $2.9279/gal, while ICE March Brent settled $1.35 higher at $115.93/b.
"The onset of much colder temperatures in continental Europe, after a prolonged mild beginning of the winter season, has been boosting gasoil prices," said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas. "The week-ahead forecasts for continental Europe are looking for below average temperature."
The expected upcoming rise in heating demand will come against average levels of distillate stocks, which in turn is supporting higher spot gasoil prices, he added.
"I think between the cold snap in Europe, there's a good margin in sending [heating oil] over to Europe from the US," said Carl Larry, president of Oil Outlooks. "That's giving the margin-hungry refiners here in the US reason to crank up [heating oil]."
Meanwhile, ICE gasoil front-month spread was testing a backwardated structure Monday as colder weather across Europe boosts demand for heating oil. The February to March spread had moved between a contango of 25 cents/mt to a backwardation of 50 cents/mt in European morning trade. But by the US close, the front-month spread settled at minus 50 cents/b.
In NYMEX heating oil, the March/April spread settled at 2.67 cents/gal Monday -- its widest spread since it moved into backwardation on December 30, 2011.
For the rest of the oil complex, focus returned to the ongoing debt crisis in the eurozone.
"Namely, member nation Greece could be on the verge of a bankruptcy, as feuding government officials could not agree to terms for a new bailout from the European Union, European Central Bank, and International Monetary Fund," said Schaeffer's Research analysts said in a note.
Greek political leaders will "very probably" meet on Tuesday to decide whether to approve new austerity measures demanded by the country's public creditors for new loans, a government source said on Monday, according to an AFP report.
The European Commission earlier noted that Greece was already effectively "past the deadline" to get a deal among the coalition partners to reshape the country's economy and slash its debt in exchange for another bailout.
