MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News May 8th:

Updated at 5:00 PM ET 

HEADLINES:

— CFTC: Managed Money Net Longs in WTI Dip in Week to May 5

— Chicago ULSD Basis Rises Tracking Buckeye, Wolverine

— Baker Hughes: Weekly North America Rig Count Up by 2  

— Chicago ULSD Basis Up as Buckeye, Wolverine Premiums Surge

— UMich: U.S. Consumer Sentiment Drops to Record Low in May

— Dallas Fed: After Q1 Inflation, New Tariff Rules Awaited

— U.S. April Nonfarm Payroll Up 115,000, Jobless Rate Steady

— Analysis: Global Oil Reset to Drag After Hormuz Reopen

NEWS:

CFTC: Managed Money Net Longs in WTI Dip in Week to May 5

Money managers reduced their bullish bets in NYMEX West Texas Intermediate (WTI) crude during the week ended May 5 as the market retreated from multi-month highs amid uncertainty surrounding the next phase of the Iran conflict, Commodity Futures Trading Commission (CFTC) data showed Friday (5/8).

Noncommercial long positions in WTI held by money managers fell by 9,141 contracts to 381,542 during the reference week, according to the weekly Commitment of Traders report of the CFTC.

Noncommercial short positions increased by 3,984 contracts to 202,756 during the same week, the CFTC said.

This caused the net noncommercial long position in WTI to decline by 13,125 contracts to 178,786. Open interest, meanwhile, gained by 50,789 contracts to 2,067,827.

Those moves in WTI came as the front-month contract on NYMEX retreated from a high of $106.88 on April 28 to $102.27 on May 5.

Noncommercial spread positions in WTI increased by 13,613 contracts to 673,689 during the same week.

Total long positions in WTI futures rose by 46,964 contracts to 1,988,673, while total short positions increased by 46,585 contracts to 2,016,037.

Chicago ULSD Basis Rises Tracking Buckeye, Wolverine

The basis for Chicago ultra-low sulfur diesel (ULSD) climbed by more than 50cts on Friday (5/8) following a sharp gain in the Buckeye and Wolverine markets during the previous trading session amid tightening supply.

ULSD basis in Chicago rose 50.5cts to a 75.5cts gallon premium over NYMEX ULSD for June delivery, the highest since May 1, when the basis stood at 78.50cts gallon, DTN data showed.

Traders noted that buyers were paying huge premiums this week for Midwest ULSD on fears of a near-term squeeze in diesel supply after U.S. Energy Information Administration (EIA) data showed a weekly drop in stockpiles.

The EIA reported on Wednesday (5/6) that distillate fuel oil inventories in the Midwest dropped by 1 million bbl to 24.9 million bbl during the week ended May 1.

Despite the weekly decline, PADD 2 distillate balances remained slightly above the 24.7 million bbl reported in the same week of the previous year, the EIA data showed.

On Thursday (5/7), the ULSD basis for Buckeye and Wolverine stood at 80cts gallon above front-month NYMEX, before both gave back 4.5cts each in the latest session to align with the premium for Chicago ULSD.

“The basis for all three is now the same, though the price itself is a lot more elevated than you’d expect,” a Midwest fuels trader, who’s familiar with the situation, told DTN.

Midwest jet fuel, meanwhile, saw modest price moves this week, after the EIA reported that jet fuel inventories in the region rose by 100,000 bbl to 7.2 million bbl during the week ended May 1, standing 6.7 million bbl above year-ago levels.

On Friday, the basis for Chicago jet fuel were flat at 35cts gallon over the front-month ULSD futures contract for a third straight session. In the Midwest’s Group 3, the differential for jet fuel moved down 3cts to stand at 8cts gallon versus the same benchmark. 

Baker Hughes: Weekly North America Rig Count Up by 2

North American energy drilling activity increased by two rigs this week, according to Baker Hughes’ weekly rigs report released Friday (5/8).

The regional rig count stood at 672 in the week to May 8, compared to 670 in the week prior. Rigs for Canada and the U.S. combined were also lower than the 692 actively deployed in the same week last year.

This week’s rig changes were driven by gains in both Canada and the United States, which each saw an increase of one rig. Canada’s count rose to 124, above the 114 seen during the same time last year. The U.S. rig count reached 548, though it remained below the year-ago level of 578.

In the United States, oil rigs alone increased by two to 410. Conversely, the gas rig count fell by one to 129, and miscellaneous rigs remained unchanged at nine.

By trajectory, directional and vertical rigs in the U.S. were unchanged at 50 and 12, respectively. Horizontal rigs rose by one to 481.

Chicago ULSD Basis Up as Buckeye, Wolverine Premiums Surge

The basis for Chicago ultra-low sulfur diesel (ULSD) rose by 35cts early Friday (5/8) to a 60cts gallon premium over front-month NYMEX ULSD futures, based on price indications. This narrowed the gap with a larger basis for the same product on the Buckeye Storage Complex and Wolverine pipeline.

With its latest move up, Chicago ULSD’s premium to NYMEX ULSD for June was at its highest level since the May 1 when it was assessed at 78.50cts gallon.

On Buckeye, located in northern Indiana, and Wolverine – whose stretches from the Chicago area to Michigan – the premium to NYMEX June ULSD was at 80cts gallon, Midwest fuel traders with knowledge of the transactions told DTN.

Traders noted that buyers were paying huge premiums this week for Midwest ULSD on fears of a near-term squeeze in diesel supply after U.S. Energy Information Administration (EIA) data showed a weekly drop in stockpiles.

The EIA reported on Wednesday (5/6) that distillate fuel oil inventories in the Midwest dropped by 1 million bbl to 24.9 million bbl during the week ended May 1. Despite the weekly decline, PADD 2 distillate balances remained slightly above the 24.7 million bbl reported in the same week of the previous year, the EIA added.

UMich: U.S. Consumer Sentiment Drops to Record Low in May

U.S. consumer sentiment worsened in May, with the Index of Consumer Sentiment dropping 1.6 points to an all-time low 48.2, according to preliminary data from the University of Michigan’s Surveys of Consumers released Friday (5/8) morning. Last month, soaring energy costs sparked by the ongoing U.S.-Israeli war on Iran led the index to plummet to a record-low 49.8, the first sub-50 reading in the survey’s history.

The Current Economic Conditions Index, measuring sentiment about personal finances and buying conditions, fell 4.7 points, or 9%, from April to 47.8. Year-on-year, the index was down 18.8%.

The Index of Consumer Expectations, which reflects the economic outlook over the next 12 months, in contrast edged higher by 0.4 points to 48.5. Last month, the index fell below the 50-point mark for the first time since May 2025.

The decline in the Current Conditions Index was owed “to a surge in concerns about high prices both for personal finances as well as buying conditions for major purchases. Real income expectations continued a decline that began in March,” said Surveys of Consumers Director Joanne Hsu.

“Consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump. Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall,” she added.

While year-ahead inflation expectations fell by 0.2 percentage points to 4.5%, they remained well above the 3.4% reading seen prior to the outbreak of the war and far higher than in 2024. Long-run inflation expectations eased 0.1 points to 3.4%.

Dallas Fed: After Q1 Inflation, New Tariff Rules Awaited

The initial shock to U.S. prices from realized tariff changes peaked in the first quarter of 2026, with the path to future inflation highly contingent on forthcoming rules, the Dallas Federal Reserve says in an analysis.

Researchers at the Texas division of the U.S. central bank say any further strengthening of core goods inflation would likely be inconsistent with the direct impacts of the 2025 tariff changes alone.

Instead, such movements would likely reflect tariff-driven spillovers or other external factors maintaining upward pressure on goods prices, the Dallas Fed notes in the analysis published on May 5.

According to Bureau of Economic Analysis data, the core PCE price index — the Fed’s preferred gauge for inflation stripped of volatile food and energy prices — remained elevated during the first quarter of 2026.

Core PCE rose 3.2% year-on-year in January, remaining at that level in February, before moderating a shade at 3.1% in March.

That came after the Trump administration imposed sweeping tariffs ranging from 10% on most global imports to 60% on goods from China and 100% on Mexican-made vehicles. Certain branded pharmaceuticals also faced rates as high as 100% depending on onshoring agreements.

The Dallas Fed said gauging the future impact is complicated by a Supreme Court decision on the International Emergency Economic Powers Act, which overturned the continued imposition of many 2025 trade levies. This legal shift has introduced a period of transition for importers and retailers.

Market participants were also focused on the Trump administration’s plans to introduce an alternative tariff structure based on the Supreme Court decision, the Dallas Fed observed, adding that this new framework will likely influence moving goods prices.

The timing of future price impacts will depend heavily on when firms incur actual costs at the border under the new rules, the Dallas Fed concluded, adding that the “realized rate” of pass-through continued to be a more accurate predictor of consumer price changes than policy announcements alone.

U.S. April Nonfarm Payroll Up 115,000, Jobless Rate Steady

The U.S. labor market added 115,000 jobs in April as the unemployment rate held steady at 4.3%, according to data released Friday by the Bureau of Labor Statistics.

The monthly employment gain surpassed the market expectation for a gain of 65,000 jobs, although the figure represented a decline from the 185,000 positions created during an unusually strong March.

Employment in April trended higher in health care, transportation and warehousing, and retail trade, while the information services sector lost 13,000 positions as artificial intelligence impacts continue.

Average hourly earnings increased 0.2% for the month and 3.6% on an annual basis, coming in slightly lower than the respective economist estimates of 0.3% and 3.8%.

The April data will be closely monitored for its potential impact on future Federal Reserve interest rate decisions as the labor market continues to defy expectations for a slowdown.

Analysis: Global Oil Reset to Drag After Hormuz Reopen

Middle East oil production and exports will likely take weeks, if not months, to approach pre-war levels once traffic through the Strait of Hormuz flows unobstructed again, meaning inventories are likely to be drawn down for a large part of 2026.

Consumers are likely to continue pulling barrels from storage long past an eventual reopening of the Strait of Hormuz, where 20 million bpd, accounting for a fifth of global supply, used to transit prior to the U.S.-Israeli airstrikes against Iran that began in late February.

The number of available empty crude oil tankers in the region is at less than half of typical levels, capping how quickly exports can return. In addition, export terminals and moorings that sustained damage from counter attacks by Iranian drones and missiles will need repairing. It will take several weeks before the first barrel arrives at an Asian refinery once flows are restored.

Logistical constraints aside, regional oil production will take months to approach antebellum levels. Some oil wells have been idle since the start of the war, and many will require deep maintenance before their output can approach pre-war levels. The same is true for pipelines, rigs and processing plants damaged during the war.

Global oil and fuel inventories have dwindled precipitously over the past two months as commercial and strategic stocks drew down rapidly to compensate for the crisis on Hormuz. Member countries of the International Energy Agency (IEA) agreed to coordinated releases of crude oil from their strategic reserves amid an askew supply-demand balance that the Paris-based energy watchdog dubbed the “largest oil supply disruption in history”.

The IEA estimates that oil inventories outside of the Middle East have depleted at a rate of 6.6 million bpd in March while stockpiles in the region grew by 3.8 million bpd amid a lack of outlets. The pace of global stockpile draws has likely sped up in April amid limited open storage capacity within the region. The recent U.S. blockade of Iranian maritime trade may also accelerate stock depletions, cutting off the only oil stream still flowing since the closure of the waterway, amounting to another 1.5 million bpd.

Goldman Sachs said this week that global oil inventories have fallen to an eight-year low by the end of April, covering about 101 days of demand, and warned they could drop to 98 days of cover by the end of May. Commercial refined product stocks have dwindled from 50 days of demand before the Iran war to now 45 days.

Prior to the war, oil stocks surged as OPEC+ started to return curtailed output from April 2025, leading to surplus given that the growth in non-OPEC production alone was close to that of global demand. Total oil inventories started the year at a five-year high and were expected to rapidly expand as supply was set to outpace demand growth.

U.S. Fills the Gap

Refiners and consumers have increasingly turned to the U.S. to fill the current gap. U.S. Energy Information Administration data showed that total petroleum exports have over the past month dwarfed previous record highs on the back of a resurgence in crude exports and refined product exports sustaining an unprecedented break-neck pace.

International demand for U.S. petroleum is unlikely to recede anytime soon, meaning inventories are set for a steeper than usual draw season. Crude oil stocks typically peak in February and March amid deep refinery maintenance before dropping continuously until troughing after the end of the main fuel demand season in September. Gasoline inventories tend to follow a similar seasonal pattern dictated by driving demand.

Continued high exports just as domestic demand is resurging could lead inventories below the near-record lows seen in 2023, lifting retail fuel prices from already elevated levels. According to EIA data, nationwide gasoline stocks have dropped to 219.8 million bbl in the week ending May 1, down 2.6% year-on-year and 2.5% below the five-year average. Distillate fuel oil inventories, meanwhile, have plummeted to a 20-year seasonal low and were at 102.3 million bbl trailing year-ago levels by 4.1% and the five-year average by 9.9%.