Crude oil and refined products futures were losing further ground as of the overnight session on Tuesday, with losses of between 0.4% (ULSD) and 1.3% (RBOB), with a slight uptick in the US dollar index but despite flat to higher trade in equities following stronger than expected economic data from Germany and the UK. Market participants looked ahead to US GDP, consumer confidence, and existing home sales figures for further direction.
Asian shares fell overnight, with the Hang Seng down 0.7%, the Nikkei losing 1.0%, and the Shanghai Composite dropping 1.9%. In news from Europe, the latest GfK consumer climate index for Germany came in at -7.3, beating consensus at -9.5 but deteriorating from a downwardly-revised -6.8 last month. Also supportive, the final estimate of third quarter UK GDP growth saw a surprise upward revision to 16.0%. As of this writing, the DAX was up 1.0% after a tumble yesterday, the FTSE 100 had added 0.3%, and the CAC 40 had climbed 1.0% higher. Market participants looked ahead to the final estimate of US third quarter GDP, seen holding at the 33.1% from the previous estimate, as well as the Conference Board’s Consumer Confidence Index, seen up slightly this month to 97.0, and existing home sales for November (expected to slow to a 6.720m annualized pace). As of this writing, Dow futures were up 0.1%, S&P 500 futures had added 0.2%, and Nasdaq futures were up 0.6%. Also slightly supportive for crude, the US dollar index was up by 0.05%. Congress yesterday passed a coronavirus relief package, which the President is expected to sign into law.
A five-session rally in petroleum futures ended yesterday with an across-the-board tumble of over two percent. Losses had been wider intraday, but futures recovered to close in the upper half of the daily range. The losses came amid news of a new and more infectious strain of the coronavirus spreading in the UK. Brexit is also coming up. On the other hand, US lawmakers looked to be making progress towards a coronavirus aid package. Brent crude fell $1.35, closing at $50.91/bbl, and WTI lost $1.36 to settle at $47.74/bbl. RBOB futures lost 3.52 cents, settling at $1.3604/g, and ULSD (HO) settled 3.56 cents weaker at $1.4774/g. New York Harbor ULSD barge differentials to NYMEX strengthened by 15 points to be even with spot NYMEX yesterday, according to Platts, while HSHO and ULSHO barge price differentials were steady at -15.30c/g and -8.50c/g, respectively. Propane prices, which have been rallying along with crude, fell back along with crude futures yesterday. Mt. Belvieu LST prices fell by 1.75 cents to 69.875c/g, non-LST prices at the Gulf Coast hub dropped 1.875 cents to 69.125c/g, and Conway spot prices tumbled 2.5 cents lower to 65.500c/g.
NYMEX natural gas futures added 50 points yesterday, settling at $2.705/mmBtu. A stronger heating degree day forecast for the next two weeks was supportive, whereas a looser picture of the market balance for the next week was unsupportive. The latest 1-5 day ECMWF outlook calls for near to above-normal temperatures in both the Midwest and the Northeast. The 6-10 day forecast, while slightly more supportive due to smaller expected temperature deviations above normal, is similar.
