Petroleum futures were trading in the black in the overnight session on Wednesday amid gains in European shares and in US stock market index futures, as well as weakness in the US dollar, despite bearish US crude oil inventory data from the American Petroleum Institute (API). Market participants looked ahead to US durable goods, weekly US labor market data, new home sales, the consumer sentiment index, and Canadian monthly GDP for further direction - along with the weekly EIA petroleum inventory report.
The API reported a 2.70mb build in US crude oil stockpiles for the week ended December 18, while expectations called for a 3.94mb draw (average of polls by Reuters and S&P Global Platts). Data for distillates were also bearish as API showed a 1.00mb rise in distillate stocks, whereas forecasts called for a 1.00mb decline. The API figures were supportive for gasoline as the industry group reported a surprise draw of 0.22mb, while a 1.31mb rise was expected. Cushing, OK crude oil inventories rose by 0.34mb last week, per API. The more closely watched EIA report is due at 10:30am. In the news this morning, Reuters reports that ExxonMobil declared a force majeure on exports from Nigeria’s Qua Iboe crude oil export terminal last week, after a fire hit the facility and injured two workers, according to a spokesman. A source told Reuters that production is expected to resume in early January.
Asian stock markets closed higher overnight with the Nikkei up 0.3%, the Shanghai Composite gaining 0.8%, and the Hang Seng adding 0.9%. In European economic news, the Producer Price Index in France rose 1.7% last month, well above expectations calling for no change. Italy’s Business and Consumer Confidence Index for December was also supportive. The manufacturing confidence index rose to 87.7 (consensus at 83.3) and the consumer confidence index came in at 102.4 (98.4 was expected). European shares were trading flat to higher this morning with the FTSE 100 down 0.1%, while the CAC 40 and the DAX were both up 0.5%. As of this writing, US stock market index futures were also trading flat to higher with Nasdaq futures steady, while Dow and S&P 500 futures were both up 0.15%. Also supportive for crude oil prices, the US dollar index was down 0.2%.
Petroleum futures fell yesterday amid strength in the US dollar and mixed trade in US equities. WTI crude settled 95 cents lower at $47.02/bbl and Brent crude lost 83 cents to close at $50.08/bbl. RBOB futures fell 2.09 cents and settled at $1.3395/g and ULSD (HO) lost 1.58 cents to $1.4616/g. According to Platts, New York Harbor ULSHO barge differentials to NYMEX weakened by 25 points to -8.75c/g, while ULSD barge differentials strengthened by 5 points to +0.05c/g. Propane prices fell along with crude yesterday, per Platts, as Mt. Belvieu LST prices fell 87.5 points to 69.000c/g and non-LST prices dropped 1.125 cents to 68.000c/g. Conway spot prices weakened by 25 points, averaging 65.250c/g.
NYMEX natural gas futures rose 7.5 cents to $2.780/mmBtu on Tuesday amid a tighter market balance expectation for next week and a stronger two-week heating degree day forecast. The latest 1-5 day forecast (EC) calls for mostly above-normal temperatures in the Midwest and well above-normal temperatures in the Northeast. The 6-10 day outlook sees above-normal temperatures across the eastern half of the country. The EIA is also due to release its natural gas storage report for the week ended December 18 this morning, and analysts polled by Reuters expect to see a 151bcf withdrawal. This would be above both the 146bcf drop seen last year and the 127bcf five-year average withdrawal.
