Crude oil and refined products futures were seeing modest gains as of this writing in the overnight session on Tuesday, with strength in equities and weakness in the US dollar likely supporting, as market participants kept an eye on efforts to increase the size of direct pandemic aid payments in the US, on a quiet morning on the economic calendar and on the newswires.
Asian shares mostly strengthened overnight. While the Shanghai Composite fell back 0.5%, the Hang Seng gained 1.0%, the Nikkei rallied 2.7%, and the Asia Dow climbed 1.5% higher. European shares were rising this morning, with the CAC 40 up 0.4%, the DAX up 0.3%, and the FTSE 100 playing catch-up with a 2.1% jump. In US news, the House passed 275-134 an increase of direct payments to individuals for coronavirus relief from $600 to the $2,000 that the President had asked for, and the action will now go to the Senate. As of this writing, Dow futures were up 0.5%, as were S&P 500 futures, and Nasdaq futures had added 0.4%. Also supportive for oil prices, the US dollar index was down 0.3%.
Petroleum futures weakened across the board yesterday, by between 0.7% (ULSD) and 1.3% (WTI), in very thin trade with this trading week sandwiched between two holidays. The losses came despite strength in equities amid news that the President signed a government funding bill, which had $600 in direct payments to individuals as part of a coronavirus aid package attached. The President had signaled he could veto the measure, and that direct payments should be larger. WTI futures fell 61 cents to settle at $47.62/bbl, and Brent crude futures shed 43 cents, closing at $50.86/bbl. RBOB futures lost 1.12 cents to settle at $1.3677/g, and ULSD (HO) settled 1.10 cents weaker at $1.4790/g.
In the New York Harbor barge market, cash differentials to spot NYMEX HO were mixed yesterday according to Platts. ULSD barge prices weakened by 10 points against futures, to a -0.10c/g differential. Meanwhile, HSHO held steady at -15.30c/g, but ULSHO strengthened by 25 points to -8.50c/g. Spot propane prices, according to Platts, strengthened yesterday. Mt. Belvieu LST propane gained 12.5 points, hitting 71.750c/g, and non-LST prices at the hub rose by 37.5 points to 71.000c/g. Conway spot propane prices jumped 1.25 cents higher to 69.750c/g.
Natural gas futures on NYMEX took an 8.5% dive yesterday with a weakening degree day outlook. Futures dropped 21.3 cents lower to settle at $2.305/mmBtu. The Global Forecast System slashed its two-week heating degree day forecast from 433 to 387, well below the 460-HDD 30-year average. As of this morning, the latest outlooks based on the European model call for above-normal temperatures in the Northeastern and Midwestern consuming regions in the 1-5, 6-10, and 11-15 day periods, with particularly large deviations above normal temperatures in the latter two periods.
