DTN Oil

CRANBURY, N.J. (DTN) -- Oil futures closest to expiration on the New York Mercantile Exchange and Brent on the Intercontinental Exchange settled lower Tuesday, with product losses outpacing the decline in crude as returning refinery activity is seen leading to increased supply availability for oil products while lifting refiner demand for crude.

Tuesday morning, The Conference Board released their U.S. Consumer Confidence Index which ticked lower in March to 104.7, well below expectations for a 106.7 reading, with U.S. consumers turning pessimistic about the future.

"Consumers remained concerned with elevated price levels," said Dana M. Peterson, chief economist at The Conference Board. "March's write-in responses showed an uptick in concerns about food and gas prices."

Peterson said confidence deteriorated for consumers under 55, and consumers in the $50,000 to $99,999 annual income range.

Historically, driving activity correlates with the confidence level of consumers, so heightened pessimism bodes poorly for gasoline demand. Cumulatively in 2024 through March 15, Energy Information Administration shows gasoline supplied to the U.S. market a modest 0.2% below the comparable year-ago period.

NYMEX April RBOB futures settled down $0.0478 to $2.7006 gallon Tuesday afternoon, with the backwardation in the prompt spread narrowing to $0.0153 ahead of the April contract's expiration Thursday afternoon.

Demand for diesel fuel has been undermined by overall weak manufacturing, with the Federal Reserve Bank of Richmond survey of manufacturing activity for March released Tuesday the latest regional indicator showing a slowdown. On Monday, the Dallas Federal Reserve Bank reported a negative downturn in Texas manufacturing activity in March.

"A business is only as good as its customers' business and is completely dependent upon its customers' demand -- and demand is weak. It's a far stronger, deeper recession than publicized," a fabricated metal product manufacturer told the Dallas Fed.

Distillate fuel supplied to the U.S. market was down 72,000 bpd or 1.9% at 3.693 million bpd against a year ago during the four weeks ended March 15, EIA data shows, although an improvement from the first 12 weeks of 2024 which was down 102,000 bpd or 2.7% year-on-year. Freezing wintry weather in January and February slowed manufacturing activity.

NYMEX April ULSD futures ended Tuesday's session $0.0568 lower at $2.6218 gallon, with the May contract settling at a narrowing $0.0059 discount to April delivery.

NYMEX May West Texas Intermediate futures settled $0.33 lower at $81.62 bbl.

ICE May Brent futures settled down $0.50 at $86.25 bbl ahead of expiration Thursday afternoon, with the June contract ending the session at a $0.62 discount.

Brian L. Milne can be reached at brian.milne@dtn.com.