Crude futures were trading flat to lower, while products were seeing gains, in the overnight session on Wednesday with mostly higher trade in US stock market index futures and weakness in the US dollar likely supporting, whereas bearish US crude oil inventory data from the American Petroleum Institute (API) and an unsupportive revision to an OPEC+ panel's oil demand growth forecast were weighing on the price action. Market participants awaited economic news in the form of the US ADP Employment report, the Chicago PMI, the NAR Pending Home Sales Index, Canadian GDP, as well as the weekly EIA inventory report for further direction.
The API reported a 3.90mb build in US crude oil stockpiles for the week ended March 26, while expectations called for small rise of 0.35mb (average of polls by Reuters and IHS Markit). Data for distillates were bearish as API showed a 2.60mb rise in distillate stocks, while forecasts called for a smaller increase of 0.24mb, whereas figures for gasoline stockpiles were bullish as the agency reported a surprise 6.00mb draw from stocks against expectations calling for a 0.57mb increase. The more closely watched EIA report is due at 10:30am. Reuters reports that the OPEC+ Joint Technical Committee has lowered its 2021 oil demand growth forecast by 0.3mb/d to 5.6mb/d amid concerns over the oil market recovery due to new coronavirus lockdowns. The JTC also raised its global oil supply growth forecast by 0.2mb/d to 1.6mb/d for this year.
Japanese industrial production fell 2.1% in February, missing the Econoday consensus calling for a smaller dip of 1.3%. The Chinese CFLP Manufacturing PMI for March came in at 51.9, above expectations at 51.0. The Shanghai Composite closed 0.4% lower, the Hang Seng fell 0.7%, and the Nikkei lost 0.9%. Across the pond, the Flash Harmonized Index of Consumer Prices (HICP) in the Eurozone rose by 1.3% y/y this month, matching the Econoday consensus. The unemployment rate in Germany remained at 6.0% this month, matching expectations. Economic data from France were mixed. The French Consumer Price Index rose 0.6% in March, above forecasts at 0.3%. On the other hand, the Producer Price Index rose 0.8% in February, down from a 1.2% rise in January. Consumer manufactured goods consumption in France rose 0.6% last month, while the Econoday consensus called for a 2.0% increase. The CPI in Italy rose 0.3% this month, above consensus at 0.2%. Economic data from the UK were mixed as well as the final reading of GDP for the fourth quarter was a 1.3% rise, above expectations at 1.0%, while the Nationwide House Price index fell by 0.2% this month, whereas forecasts called for a 0.4% increase. As of this writing, the DAX was down 0.05% and the FTSE 100 and the CAC 40 had both lost 0.2%. US stock market index futures were trading mixed with Dow futures down 0.1%, while futures for the S&P 500 and the Nasdaq were up 0.1% and 0.6%, respectively. The US dollar index was down 0.1%, which is supportive for crude oil prices.
Petroleum futures weakened yesterday amid fresh lockdowns across Europe, the reopening of the Suez Canal, weakness in US equities, and further strength in the US dollar. WTI crude fell $1.01 to settle at $60.55/bbl and Brent crude lost 84 cents to close at $64.14/bbl. RBOB futures edged down 62 points, settling at $1.9890/g, and ULSD (HO) futures weakened 2.06 cents to $1.7892/g. According to Platts, the New York Harbor ULSD barge differential to NYMEX strengthened by 50 points to -0.10c/g, while HSHO and ULSHO barge differentials held steady at -25.25c/g and -15.25c/g, respectively. Also per Platts, propane saw flat-to-higher prices on Tuesday as Mt. Belvieu non-LST prices remained at 90.375c/g, while LST prices strengthened by 1.125 cents to 91.125c/g. Conway spot prices rose 75 points to 85.250c/g.
Natural gas futures fell 3.0 cents to settle at $2.623/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 below-normal temperatures in the Northeast (save for some parts of New England) and mixed but also mostly below-normal temperatures are expected in the Midwest. The 6-10 day forecast sees above-normal temperatures across the majority of the country with large deviations above normal temperatures seen in the Midwest.
