Crude oil and refined products futures were seeing flat-to-higher trade as of this writing in the overnight session on Tuesday, with modest strength in US shares likely supporting, whereas a rebound in the US dollar index was unsupportive. European shares were mixed following mixed data, which were unsupportive on balance, and the Asian market saw mixed trade as well. Market participants looked ahead to US international trade and labor market data for further direction.
Asian shares saw mixed but mostly higher trade overnight. The Hang Seng fell 0.5%, but the Shanghai Composite gained 0.7%, the Nikkei rallied 1.6%, and the Asia Dow strengthened 0.9%. Economic data from across the pond were mixed but overall disappointing this morning. Although Eurozone economic sentiment was stronger than expected last month, per the European Commission index (90.4 versus 89.5 consensus), Eurozone retail sales contracted 6.1% in November – much sharper than the 3.6% forecast and coming with a downward revision of 0.1 percentage points to October sales growth (down to 1.4%). Moreover, the flash December Harmonized Index of Consumer Prices (HICP) for the Eurozone fell 0.3%, further than the 0.2% consensus forecast. In the plus column, German manufacturers orders grew 2.3% in November, beating forecasts calling for a 1.2% drop, but UK Construction PMI (CIPS/Markit) was another item in the minus column, seeing a surprise drop last month from 54.7 to 54.6 (55.0 had been expected). The FTSE 100 was down 0.4%% as of this writing, but the CAC 40 was up 0.3% and the DAX had gained 0.4%.
In US news, the President yesterday asked supporters to march on the Capitol and many did so, ending with four deaths and 52 arrests. The President later pledged an “orderly transition” on January 20. US stock market index futures were seeing gains this morning, with Dow futures up 0.2%, S&P 500 futures up 0.3%, and Nasdaq futures having gained 0.7%. Whereas this was supportive for crude, a 0.3% rebound in the US dollar index was not.
Petroleum futures strengthened further across the board yesterday amid a rally in equities and bullish US crude oil inventories. Brent and WTI crude futures each gained 70 cents, settling at $54.30/bbl and $50.63/bbl, respectively. The RBOB crack did not narrow, despite bearish gasoline stock data, with futures up 2.29 cents for a $1.4750/g settlement. The ULSD crack did narrow, consistent with bearish distillate stock data in the weekly EIA report, with futures adding just 98 points to settle at $1.5287/g. New York Harbor distillate barge price differentials were flat to weaker yesterday, according to Platts. HSHO barge prices weakened by 75 points to -13.75c/g against spot NYMEX, and ULSHO barges fell by 25 points to trade at -10.00c/g to futures. The ULSD barge price differential held steady at -0.25c/g. January propane prices, per Platts, strengthened yesterday. Mt. Belvieu LST prices rose 75 points to 80.750c/g, non-LST prices at the hub added 12.5 points to hit 79.250c/g, and Conway prices gained 75 points, hitting 78.000c/g. Weekly EIA propane/propylene data were neutral to unsupportive.
Natural gas futures on NYMEX edged up 1.4 cents yesterday, settling at $2.716/mmBtu with a slightly stronger two-week heating degree day forecast. The latest ECMWF 1-5 day outlook sees mixed, near-normal temperatures in the Northeast but above-normal temperatures in the Midwest. Temperatures in the Midwest are expected to be well above normal in the 6-10 day forecast, with above-normal temperatures in the Northeast. The EIA is due to release its weekly natural gas storage report this morning, for the week ended January 1. Analysts polled by Reuters see a 135bcf withdrawal being reported, well above last year's 44bcf withdrawal and the 101bcf five-year average.
