RBOB rallies as more refiners cut runs, but crude slides on dimming demand outlooks

RBOB futures climbed higher Monday against the rest of the oil complex as more refiners cut runs amid a sharp downturn in gasoline demand due to the proliferation of stay-at-home orders aimed at slowing the COVID-19 pandemic.

NYMEX May RBOB settled up 1.18 cents at 58.55 cents/gal, while May ULSD was down 4.91 cents at $1.0194/gal.

The North Atlantic Refining Company idled its 130,000 b/d refinery in Come by Chance, Newfoundland, for an undetermined period of time, a company spokeswoman said Monday.

Market sources said that rates at Irving's 330,000 b/d St. John, New Brunswick, refinery were also lower by 20%-25%.

The eastern Canadian refineries are a major source of gasoline imports into the high-demand US Atlantic Coast. But with the region on lockdown, end-user gasoline purchases have plummeted.

Road monitoring suggests that travel may be down by roughly 50% in "at risk" areas, S&P Global Platts Analytics analysts said, adding that total US gasoline demand could be down as much as 25% last week.

At least 30 US states have issued blanket "stay-at-home" orders, and partial orders are present in at least 13 others, according to media reports. In sum, at least 251 million people are facing government requests that non-essential workers remain home.

Total gasoline stocks are expected to have climbed 3.6 million barrels to around 242.9 million barrels during the week ended March 27, analysts surveyed by Platts said. The expected build would snap eight consecutive weeks of draws and put stocks 2.4% above the five-year average of US Energy Information Administration data.

Crude futures moved lower Monday as demand outlooks dimmed.

NYMEX May WTI settled down $1.42 at $20.09/b and ICE May Brent was $2.17 lower on the day at $22.76/b.

Global crude demand is now forecast to contract 4.5 million b/d in 2020 due to the COVID-19 pandemic, according to the latest S&P Global Platts Analytics monthly forecast released Friday.

Monday was the lowest front-month settle for WTI since February 2002, while Brent was last lower in March of that year.

May WTI traded as low as $19.27/b late in the session, but a last-minute rally brought the contract above the $20/b mark at settle.

Options data, which is a day behind, shows $20/b as a key resistance point for the contract. Open interest on the $20/b May WTI put stood at 8,422 contracts on Friday, according to data provider MarketView.

"Oil prices are nearing the bottom," OANDA senior market analyst Edward Moya said. "Despite a significant number of bearish headlines, WTI crude has only tentatively dipped below the $20/b level."

US President Donald Trump discussed oil prices with Russian President Vladimir Putin, but the call had little effect on oil markets.

"There was an exchange of views on the current state of the world oil market, and it was agreed that Russian-American consultations should be held on this subject by energy ministers," according to a statement from the Kremlin press office.

Tuesday marks the expiry of an OPEC+ production cut agreement that saw the alliance pull a collective 1.7 million b/d off the market from December onward. Russia's refusal earlier in March to sign up for an extended production cut proposal forged by the Saudis in an effort to prop up the market in the face of the coronavirus pandemic sparked a plunge in the price of oil and refined products.