Petroleum futures were seeing gains of over one percent in the overnight session on Wednesday amid strength in US stock market index futures and news that a ship ran aground in the Suez Canal, despite losses in European equities, continued strength in the US dollar, and bearish US crude oil inventory data from the American Petroleum Institute (API). Market participants looked ahead to US durable goods orders data, the US flash composite PMI, Eurozone consumer confidence data, and the weekly EIA inventory report for further direction.
The API reported a 2.90mb build in US crude oil stockpiles for the week ended March 19, while expectations called for a 1.00mb draw (average of polls by Reuters and S&P Global Platts). Data for distillates were neutral to unsupportive as API showed a build of 0.25mb in distillate stockpiles, while forecasts called for no change. The API figures were bullish for gasoline as the industry group reported a draw of 3.70mb from gasoline inventories, while forecasts called for an increase of 1.04mb. Cushing, OK crude oil inventories fell by 2.30mb last week, per API. The more closely watched EIA report is due at 10:30am. Reuters reports that eight tug boats were attempting to free a 440-yard long container ship that ran aground in the Suez Canal after losing the ability to steer due to high winds and a dust storm. The ship was blocking vessels passing through one of the world’s most important waterways, according to the authority that runs the canal.
The flash March Markit Composite PMI for Japan came in at 48.3, rising slightly from an upwardly-revised 48.2 last month. The Japanese flash Manufacturing PMI rose from an upwardly-revised 51.4 in February to 52.0 this month. Despite supportive economic data from Japan, Asian stock markets closed in the red with the Shanghai Composite down 1.3%, while the Nikkei and the Hang Seng both dropped 2.0% overnight.
Across the pond, the flash March Composite PMI for the Eurozone came in at 52.5, above expectations at 49.1 and up from 48.1 last month. The flash Composite PMI for France was also a beat, at 49.5 (vs 47.0), and the index for Germany beat expectations by coming in at 56.8 (vs 51.8). The flash Composite PMI for the UK came in at 56.6, above the 51.2 Econoday consensus, and up from 49.8 in February. In more UK news, the Producer Price Index (PPI) for last month showed output prices rising by 0.6% (above consensus at 0.3%), and input prices rising 0.6% (expectations were at 0.7%). The Consumer Price Index in the UK showed consumer prices rising 0.1% in February, below the 0.5% expectation. As of this writing, the FTSE 100 and the CAC 40 were down 0.2%, whereas the DAX had lost 0.5%. The US dollar index was up 0.2%, which is unsupportive for crude oil prices. On the other hand, US stock market index futures were seeing gains of between 0.3% (Dow f) and 0.8% (Nasdaq f).
Petroleum futures lost ground yesterday amid doubts over the AstraZeneca vaccine, losses in equities, and a rally in the US dollar. Brent lost $3.83 to settle $60.79/bbl and WTI dropped $3.80 to close at $57.76/bbl. RBOB futures fell 6.34 cents, settling at $1.8964/g and ULSD (HO) tumbled 8.04 cents lower to $1.7489/g. Per Platts, New York Harbor HSHO and ULSHO barge differentials weakened by two cents and 30 points to -25.25c/g and -15.60c/g, respectively. The ULSD differential held steady at -0.35c/g. March propane prices fell along with crude yesterday, according to Platts, with Mt. Belvieu non-LST prices down one cent to 88.500c/g and LST prices losing 2.250 cents to 88.000c/g. The Conway spot price dropped 3.750 cents to 79.750c/g.
Natural gas futures fell 7.4 cents to settle at $2.508/mmBtu with a looser market balance expectation for next week and a weaker two-week heating degree day forecast. The latest 1-5 day ECMWF outlook calls for mostly above-normal temperatures on the East Coast and above-normal temperatures in the Midwest. The 6-10 day forecast sees near to above-normal temperatures in the Northeast, while mixed temperatures are expected in the Midwest.
