Petroleum futures were seeing further, relatively small losses as of this writing in the overnight session on Friday, amid strength in the US dollar and mixed trade in equities, as well as data showing decreased Chinese mobility due to the coronavirus.
Data from the Chinese Ministry of Transportation showed Lunar New Year travel was down sharply from the pre-coronavirus levels of two years ago. A Baidu Inc travel index based on GPS data showed a 41% decline in travel compared to 2019. Despite this news, the Shanghai Composite climbed 1.4% higher overnight, and the Hang Seng gained 0.5%. The Nikkei, however, shed 0.1%. In supportive news, consumer price inflation in India was softer than expected last month at 4.06% year-on-year (consensus was 4.4%), and industrial production grew 1.0% year-on-year in December, after a 1.9% yearly decline in November.
Economic data out of the UK this morning were mixed but mostly encouraging. Industrial production growth of 0.2% in December fell short of the 0.5% expectation, but there were base effects November output was revised up and out of a 0.1% contraction to a 0.3% expansion. The UK economy grew 1.2% in December, beating the 0.7% forecast, and November GDP was revised up from -2.6% to -2.3%. For the fourth quarter overall, UK GDP growth came in at 1.0% - twice the 0.5% expectation. The FTSE 100 was up 0.1% as of this writing, as was the CAC 40, while the DAX was down 0.4%. US stock market index futures were trading flat to lower, with Dow futures steady, S&P 500 futures up 0.2%, and Nasdaq futures up 0.4%. Whereas this was supportive for crude, the US dollar index was up 0.2% after five sessions lower. Market participants looked to the preliminary February University of Michigan US consumer sentiment index for further direction, expected to strengthen to 80.9.
Brent crude futures ended a seven-session rally yesterday, losing 33 cents and closing at $61.14/bbl amid bearish demand outlooks from the IEA and OPEC, strength in the dollar, and mostly weaker trade in US shares. WTI settled 44 cents lower at $58.24/bbl. RBOB futures edged down 32 points to $1.6502/g, and ULSD (HO) fell 1.64 cents to settle at $1.7446/g. New York Harbor ULSD and HSHO barge price differentials to NYMEX were steady yesterday, with the former at +0.20c/g and the latter at -20.25c/g. ULSHO barge prices weakened by 50 points to -11.25c/g against spot futures, according to Platts. February propane prices fell along with crude yesterday, especially at Conway. According to Platts, Conway prices dropped 6.25 cents lower to 90.500c/g yesterday. Mt. Belvieu non-LST prices lost 50 points, falling to 85.250c/g, and LST prices at the Texas hub fell 87.5 points to 85.125c/g.
Natural gas futures on NYMEX lost 4.3 cents yesterday, settling at $2.868/mmBtu with a weaker heating degree day forecast and a bearish weekly storage report from the EIA. Although the heating degree day forecast has been revised down, well below normal are still the expectation in both the 1-5 and 6-10 day outlooks based on the European model, especially in the central part of the country.
