NYMEX RBOB, ULSD climb as market eyes US stimulus bill

New York — Refined product futures settled higher Sept. 25 as demand outlooks improved amid US stimulus optimism, but resurgent coronavirus cases in Europe weighed on crude prices.

NYMEX October RBOB settled 1.85 cents higher at $1.2142/gal and October ULSD climbed 95 points to settle at $1.1262/gal.

Front-month ICE NYH RBOB crack versus Brent climbed above $8/b mid-afternoon Sept. 25, on pace for the strongest close since July 28.

US Treasury Secretary Steven Mnuchin and House of Representatives Speaker Nancy Pelosi agreed Sept. 24 to revive negotiations on a federal stimulus bill that stalled during the summer.

House Democrats are seeking an aid plan for airlines, restaurants, and small businesses worth $2.4 trillion, according to media reports Sept. 25. The White House has signaled that it would support $1.5 trillion in spending, but some Republicans are opposed to even that level. The bill the House passed in May was worth $3.5 trillion and included $25 billion for airlines.

"The key is if we get a relief package for COVID-19, that could set the stage for a good recovery next week," Price Futures Group senior market analyst Phil Flynn said. "The thing that's been holding us back is more concerns about the rise in COVID-19 cases, it's been the Achilles' heel for markets. But if stocks bounce back, that means the economy will do well and demand for oil will be stronger than anticipated."

Crude futures edged lower Sept. 25 as rising coronavirus cases clouded demand outlooks.

NYMEX November WTI settled 6 cents lower at $40.25/b and November Brent dipped 2 cents to $41.92/b.

In Europe, a resurgence of the coronavirus is prompting governments to reintroduce new restrictions. About 40% of Madrid's intensive care capacity is now taken up by people suffering from the virus, while France, the UK, and Spain reported 16,096, 6,634, and 2,321 new cases, respectively, Sept. 24 -- the highest totals for those countries since spring.

In India, the return of lockdowns in several states to combat the pandemic has contributed to lower crude runs, analysts said. Average capacity utilization for all categories of refineries declined to 76% in August from 83% in the previous month, the latest survey of the oil ministry showed. The run rate was 104% during the same period a year ago.