Petroleum futures were rising for a fifth session in the last six this morning, despite indications that OPEC+ output cut agreement compliance waned in December. The gains came a modest rise in US stock market index futures, but European shares were mixed following disappointing economic data from Italy. The US dollar index was flat.
In unsupportive supply-side news this morning, tanker tracker Petro-Logistics estimates that OPEC+ compliance with the output cut agreement fell to just 75% last month, one of the lowest levels of compliance since May.
Asian shares closed flat to higher overnight, as the Nikkei edged up 0.1% but the Hang Seng jumped 1.3% higher and the Shanghai Composite rallied 2.2%. In European news, Italian retail sales tumbled 6.9% lower in the month of November, far sharper than the 0.8% dip predicted by analysts. Additionally, October retail sales growth was revised down by 0.1 percentage points to 0.5%. As of this writing, the FTSE 100 was down 0.6% and the CAC 40 had shed 0.1%, but the DAX had added 0.1%. Futures for the major US stock market indexes were seeing gains of about 0.3%. The US dollar index was off 0.05% after four sessions higher. Market participants looked ahead to the Job Openings and Labor Turnover Survey (JOLTS) for further direction, on relatively quiet day on the economic calendar and a quiet morning on the newswires. The report is expected to show US job openings at 6.652 million in November.
After four sessions higher, Brent crude and refined products futures fell back on Monday, and WTI futures stalled in their rally, adding just one cent. Likely weighing on the price action were losses in US and European shares and a continued rally in the US dollar index that saw it hit its strongest levels since December 21. Brent crude shed 33 cents, closing at $55.66/bbl and WTI settled one cent higher at $52.25/bbl. RBOB futures fell 2.15 cents, settling at $1.5208/g, and ULSD (HO) settled at $1.5735/g, down 60 points. New York Harbor ULSD barge prices weakened by 30 points against spot NYMEX, putting the differential at -0.40c/g according to Platts, who also saw ULSHO and HSHO differentials steady at -10.50c/g and -15.75c/g, respectively. Whereas crude futures saw flat-to-lower trade yesterday, propane prices continued higher according to Platts. Mt. Belvieu LST prices climbed 1.25 cents higher to 87.750c/g and non-LST prices added 50 points, reaching 86.000c/g. Conway prices rose by 62.5 points to 84.000c/g.
Natural gas futures traded on NYMEX added 4.7 cents on Monday, settling at $2.747/mmBtu despite a continued unsupportive near-term temperature outlook (ECMWF and GFS) and expectations that the US market balance will loosen next week (Refinitiv). The latest 1-5 day ECMWF outlook calls for well-above-normal temperatures in the Midwest and for those parts of the Northeast bordering Canada, and above-normal temperatures are expected in both the Midwest and the Northeast in the 6-10 day forecast as well. The 11-15 day outlook has seen some supportive shifts, however, with mixed near-normal temperatures expected in both regions.
