Crude oil and refined products futures were seeing losses of over one percent as of this writing in the overnight session on Tuesday, with a continued rally in the US dollar and the resumption of maritime traffic along the Suez Canal, as well as lockdowns in Europe likely weighing on the price action, whereas indications that Saudi Arabia would like to roll OPEC+ output policy into June, encouraging Japanese economic data, and strength in Asian and European shares were supportive. Market participants looked to US home price and consumer confidence data for further direction.
Reuters reports that, according to a source, Saudi Arabia is prepared to support extending oil production curbs into June and, perhaps more significantly, that it is prepared to prolong its voluntary output cuts. According to four OPEC sources, rising European coronavirus case counts and fresh lockdowns are likely to push OPEC+ to extend cuts into May, when the group meets this week on Thursday. Separately, Reuters reports that slower than expected vaccine rollouts and fresh European lockdowns are likely to restrain the recovery in global fuel demand. Germany is under lockdown through April 18 in order to contain a third wave of the virus, one third of French people are under month-long restrictions, and much of Italy has put some restrictions in place, as have Austria, Switzerland, and Norway.
The Japanese unemployment rate held steady at 2.9% last month, as expected, and retail sales the same month saw a 1.5% year-on-year decline – beating expectations calling for a 2.6% drop. The Nikkei added 0.2%, lagging a 0.6% gain in the Shanghai Composite and a 0.8% jump in the Hang Seng. European data this morning were encouraging as well. The European Commission Economic Sentiment Index for March came in at 101.0, up from 93.4 and beating consensus at 96.0. Market participants looked ahead to the US S&P Corelogic Case-Shiller home price index for January, expected to show a 1.2% monthly appreciation, as well as to the Conference Board’s March consumer confidence index, seen rising from 91.3 to 96.0. US stock market index futures were trading flat to lower as of this writing, with Dow futures steady while S&P 500 futures were down 0.3% and Nasdaq futures had lost 0.7%. Also unsupportive for crude, the US dollar index was up 0.2% and at its strongest levels since early November.
The complex settled flat to higher on Monday, with indications that Russia would like to see OPEC+ output policy (mostly) roll over into May likely supporting along with gains in European shares, whereas news that the MV Ever Given was refloated in the Suez Canal was unsupportive. Brent crude futures added 41 cents, closing at $64.98/bbl, while WTI climbed 59 cents higher to settle at $61.56/bbl. RBOB futures gained 2.79 cents for a $1.9952/g settlement, while ULSD (HO) edged down 2 points, settling at $1.8098/g. According to Platts, ULSD, ULSHO, and HSHO barge price differentials to spot NYMEX held steady yesterday, at -0.15c/g, -15.25c/g, and -25.25c/g, respectively. Spot propane prices made mixed moves. According to Platts, non-LST prices at Mt. Belvieu slipped 12.5 points lower to 90.375c/g, but LST prices at the hub added 50 points, reaching 90.000c/g, and Conway prices jumped 2 cents higher to 84.500c/g. Platts notes that the recent Suez Canal blockage does not seem to have affected the LPG market.
Natural gas futures on NYMEX added 2.9 cents, settling at $2.586/mmBtu yesterday. The latest 1-5 day ECMWF outlook calls for below-normal temperatures across the East Coast, save for northern New England, while mixed temperatures are expected in the Midwest. The 6-10 day forecast is unsupportive, as above-normal temperatures are expected across most of the country, with particularly large deviations above normal in the Midwest.
