MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for January 16th:

Updated at 5:00 PM ET 

MarketWire will be closed for the Martin Luther King Jr. holiday on Monday (1/19) and will resume publication on Tuesday (1/20).

HEADLINES:

— CFTC: WTI Net Length Up Jan. 6 Week on More Short Covering

— LA ULSD Discount to RBOB Steady, SF Weakens 

— Baker Hughes: North America Rig Count Up by 28 on Week

— Analysis: How Geopolitical Turmoil Impacts U.S. Refiners

— Phillips 66 Reports New Flaring at Wilmington Refinery

— PBF Reports Second Ongoing Emergency Flare at Torrance

NEWS:

CFTC: WTI Net Length Up Jan. 6 Week on More Short Covering

Speculators adjusted positions across major NYMEX energy contracts during the week ended January 6, with shifts led by crude oil and gasoline, according to the Commodity Futures Trading Commission’s Commitment of Traders report released Friday late afternoon (1/9).

In NYMEX West Texas Intermediate futures, noncommercial long positions increased by 27,180 contracts to 286,136, while short positions rose by 26,404 contracts to 228,008. As a result, the noncommercial net long position widened by 776 contracts to 58,128. Open interest rose by 49,910 contracts to 2,018,789, CFTC data shows.

In NYMEX RBOB gasoline futures, noncommercial long positions declined by 319 contracts to 109,165, while short positions fell by 2,888 contracts to 36,638. The moves lifted the noncommercial net long position by 2,569 contracts to 72,527. Open interest increased by 29,339 contracts to 450,217 during the reporting week.

In NYMEX ULSD futures, noncommercial long positions decreased by 1,802 contracts to 62,981, while short positions increased by 2,557 contracts to 48,470. The changes reduced the noncommercial net long position by 4,359 contracts to 14,511. Open interest increased by 14,278 contracts to 367,652, according to CFTC data.

In NYMEX natural gas futures, noncommercial long positions increased by 17,007 contracts to 270,263, while short positions climbed by 37,049 contracts to 455,864. The moves deepened the noncommercial net short position by 20,042 contracts to 185,601. Open interest rose by 39,051 contracts to 1,635,220 during the week.

LA ULSD Discount to RBOB Steady, SF Weakens

Los Angeles ULSD differentials held steady at a 5ct discount to February NYMEX RBOB futures on Friday (1/16), while San Francisco ULSD basis weakened further, falling to a 16.5cts discount amid sustained selling pressure in the spot market.

Market participants said LA ULSD values remained unchanged on the session, reflecting balanced supply demand conditions and limited spot activity in Southern California.

In San Francisco, however, ULSD basis continued to trend lower following a gradual erosion that began earlier in the month. The decline started January 9, when SF ULSD basis slipped to a 10cts discount from a prior 8cts, according to market sources.

The move lower accelerated by January 12, when San Francisco ULSD was assessed at a 16.5cts discount to February NYMEX RBOB futures, marking the weakest level seen so far this month.

Market participants did not cite a specific reason behind the decline.

Baker Hughes: North America Rig Count Up by 28 on Week

North American drilling activity jumped by 28 rigs this week, adding to last week’s 94-rig climb, with the surge driven again by Canadian activity, Baker Hughes’ latest rig count report released Friday (1/16) showed.

The combined change in U.S. and Canadian rig counts left the total North American rig count at 769, versus the prior week’s tally of 741. Year-over-year, North American rigs were lower by 40 from the 809 rigs operating during the same week last year.

Canada’s total rig count rose by 29 week-over-week to 226. By contrast, the U.S. rig count slipped by one to 543, slightly offsetting the broader North American surge.

In the United States, land-based drilling activity fell by one rig to 524 for the week. Activity offshore and in inland waters were both unchanged at 16 and three, respectively.

Year-over-year, U.S. rigs were lower by 37 from the 544 reported during the same week last year.

U.S. rigs drilling for oil rose by one to 410. Those drilling for gas slid by two to 122. The miscellaneous rig count was flat at 11.

By drilling type, horizontal and vertical rigs were both unchanged at 475 and 12, respectively. Directional rigs slipped by one to 56.

Analysis: How Geopolitical Turmoil Impacts U.S. Refiners

Ongoing geopolitical risk from potential supply disruptions in Iran and Russia, along with the outlook of increasing output from Venezuela, have deepened volatility in oil futures since the year began – making it more challenging for U.S. refiners to hedge positions and plan operations effectively.

At the same time, U.S. refiners stand to profit from some geopolitical developments. Russia’s gasoline and diesel export ban in response to fuel shortages caused by Ukrainian strikes on Russian downstream infrastructure have created opportunities for U.S. refiners to increase their international sales and to profit from stronger crack spreads.

Iran’s protest and U.S. threats of airstrikes against the Islamic republic were catalysts to the powerful but brief oil rally that marked the early days of 2026.

While the Iran’s government crackdown appears to have abated, as has the potential for reprisals warned by U.S. President Donald Trump, the risk to Iran’s 3.2 million bpd oil output – OPEC’s fourth largest – is not over.

Making an example of Venezuela, the U.S. showed the world over the past month how far it will go in exercising its power over oil embargoes. First, it seized Venezuelan crude cargoes. Then, it captured the country’s president Nicolas Maduro and compelled the interim government installed in his place to cooperate with the White House. Now, the Trump administration is in the process of transferring tens of millions of Venezuelan barrels to its control, oil that will be co-owned by the United States and marketed directly by U.S. entities.

Russia’s invasion of Ukraine in February 2022 catapulted crude to above $100 bbl in what turned out to be the most impactful geopolitical event for oil in decades. Fast forward four years, prices are down 40% or more, with the downtrend beginning just a few months after the invasion as supply-demand and market psyche adjusted as rapidly as the exchange of hostilities between the warring sides.

Through it all, geopolitical turmoil has continued to trigger wild fluctuations and sizable price spikes in oil. While some phenomena were temporary in nature, many supply risks stemming from wars, sanctions and embargos remain in place and raise forecast uncertainty.

Given those factors, the variables in the Russian and Iranians sanctions are worthy of reexamination in hazarding a guess to the endgame they could bring.

Russia

The European Union’s import embargoes on Russian crude and oil products – as well as the G-7’s price cap – has redirected oil and refined product flows with a steep discount on Russian barrel pricing. With this, Western nations achieved their primary objective: Keep as much oil on the global market as possible while stymying the Kremlin’s energy revenues.

Secondary sanctions on buyers of Russian oil, however, may pose an actual supply risk. The U.S. has repeatedly threatened to impose punitive economic measures on countries still receiving Russian oil. This pressure ramped up during the fourth quarter of 2025 and led to many Indian refiners shunning oil of Russian origin. As a result, volumes of oil on water soared as already laden tankers struggled to find buyers. If Indian refiners remain reluctant to purchase Russian oil cargoes, the resulting backlog will quickly force production shut given Russia’s limited storage capacity.

Since mid-2025, the war in Ukraine has posed an increasing risk to global oil supply. Ukrainian strikes on Russian energy infrastructure last year led to fuel shortages in Russia and the imposition of an export ban on gasoline and diesel.

Trilateral negotiations between the warring parties and the United States have, after an initial display of optimism, remained fruitless. The European Union is on the verge of adopting its 20th sanctions package against Russia, which will also target the oil field services sector, and potential secondary sanctions on buyers of Russian oil are receiving bipartisan support in the U.S. Senate.

Iran

With Trump’s re-entry to the White House this year, the U.S. reimposed sanctions he introduced on the Islamic republic in 2018. Like the restrictions on Russian oil, these measures had a rather limited impact on export volumes. Iranian tankers sailed with turned off transponders, and Chinese shippers with little exposure to western financial systems still scooped up the oil, whose origin was often concealed after a series of ship-to-ship transfers near Singapore. Often rebranded as “Malaysian oil”, Iranian crude has continued to be a staple of Chinese refiners’ diet.

As is the case with Russia, sanctions impact needs to be measured in actual losses of physical supply. Stricter enforcement of sanctions, U.S. attacks on critical infrastructure or a large-scale mass strike of oil workers are among the most realistic scenarios which could hamper Iranian supply.

The current protests in Tehran pose the most serious challenge to the regime there and are fundamentally of a different nature than demonstrations in years past, which were often confined to certain ethnic groups or regions of the country. This time, country-wide mass protests, sparked by an economically precarious situation and high inflation, are actively demanding a change in leadership, and come at a time when the Mullah leadership there is at its weakest. At the same time, the option of U.S. strikes remains on the table.

The ongoing turmoil in both Ukraine and Iran still carries potential to translate into substantial supply outages – and price action. U.S. refiners, meanwhile, are poised to continue benefiting from sanctions on Russia and Iran, and the possible return of Venezuelan heavy sour crude oil flows.

Phillips 66 Reports New Flaring at Wilmington Refinery

Phillips 66 reported a new ongoing flaring event at its 139,000 bpd Wilmington, California refinery, beginning at 10:03 a.m. PT on Thursday (1/15) and expected to continue through 11:59 p.m. PT on Sunday (2/1), according to a filing with the South Coast Air Quality Management District.

The company said the flaring was attributed to start-up/shut-down operations, the filing showed.

PBF Reports Second Ongoing Emergency Flare at Torrance

PBF Energy reported an ongoing open-ended emergency flare at its 166,000 bpd Torrance, California refinery on Friday (1/16), the second such notification it has issued in as many days.

According to PBF’s latest filing with South Coast Air Quality Management District, the latest flare began at 12:00 a.m. PT Friday and was due to mechanical reasons. No estimated end time was given.

On Thursday (1/15), the refinery reported a separate emergency flaring at Torrance that began at 7:05 a.m. PT. No end time was provided for that either.

The two emergency flaring events follow a planned one at Torrance that began on January 8 at 8:29 a.m. PT and was scheduled to continue through Sunday, January 18 until 11:59 p.m. That event, the first for the refinery this year, was due to “startup/shutdown” issues, PBF said a filing with South Coast AQMD.