Petroleum futures were seeing flat-to-higher trade as of this writing in the overnight session on Tuesday, following the release of a monthly oil market report from OPEC containing a bullish demand forecast revision, while modest appreciation in the US dollar and news that Johnson & Johnson’s COVID-19 vaccine may also be linked to rare blood clot disorders may have been limiting gains. Market participants looked ahead to US consumer price inflation data for further direction.
OPEC released its April Monthly Oil Market Report, which showed the group raised its 2021 global oil demand growth forecast by 60kb/d to 5.95mb/d. OPEC sees most of the growth in consumption occurring this quarter and next, but notes that summer gasoline demand is still expected to trail 2019 levels due to headwinds from the coronavirus. OPEC production rose by 200kb/d to 25.04mb/d last month, according to OPEC, driven by increased Iranian oil production. Indirect US-Iranian talks aimed at reviving nuclear talks recently took place in Vienna.
Asian shares mostly strengthened overnight, with the Asia Dow up 0.16%. The Nikkei climbed 0.72% higher and the Hang Seng added 0.15%. The Shanghai Composite, however, fell 0.48% following Chinese merchandise trade data for March. The country’s trade surplus shrank from $103.25bn in February to $13.8bn last month, well below consensus at $52.8bn. However, imports shot up 38.1% over last year, well above consensus at 22.0%, and exports jumped 30.6% higher year-on-year (although this was a miss against 33.0% consensus). European shares were mixed this morning following mixed economic data releases. The ZEW Survey in Germany showed sentiment on current economic conditions was stronger than expected (-48.8 versus -52.0 expected), but that sentiment on future conditions deteriorated more than predicted (70.7 versus 77.0). Also a miss was Italian industrial production for February, which rose 0.2% against expectations for a 0.6% rise. The DAX was up 0.08% as of this writing, nevertheless, and the CAC 40 had added 0.16%. In UK news, GDP grew 0.4% in February, missing consensus at 0.6%. Industrial production the same month grew 1.0%, beating the 0.5% expectation. The GDP figure, of course, carries more weight, and a 0.18% drop in the FTSE 100 this morning was consistent with the data.
Reuters reports that US federal health agencies have recommended pausing distribution of Johnson & Johnson’s single-dose coronavirus vaccine. Six recipients have developed a rare disorder involving blood clots. The CDC and FDA issued a joint statement saying that adverse events from the Johnson & Johnson vaccine appear to be extremely rare – over 6.8 million doses have been administered in the US; the CDC will hold an advisory meeting tomorrow to review the cases. As of this writing, Dow and S&P 500 futures were seeing losses of 0.32% and 0.21%, respectively, while futures for the Nasdaq were edging 0.07% higher.
The complex settled flat to higher on Monday with Middle East tensions likely providing some support along with weakness in the US dollar index, whereas trade in US and European shares likely weighed on the price action during the session. Brent crude added 33 cents, closing at $63.28/bbl, and WTI settled 38 cents stronger at $59.70/bbl. RBOB futures settled 79 points higher at $1.9700/g, and ULSD (HO) settled at $1.8080/g, up just 4 points. The New York Harbor ULSD barge price differential to spot NYMEX HO weakened by 25 points to -0.25c/g yesterday, according to Platts, and the ULSHO barge price differential weakened by 5 points to -15.40c/g; the HSHO differential held steady at -25.75c/g. April propane prices were mixed yesterday, per Platts, as Mt. Belvieu LST and non-LST prices fell by 37.5 and 62.5 points, respectively, to 81.625c/g and 81.875c/g. Conway prices, meanwhile, rose by 75 points to 75.000c/g.
NYMEX natural gas futures added 3.5 cents, settling at $2.561/mmBtu with supportive shifts to the temperature outlook. Well below normal temperatures are expected in the Midwest and Northwest, while near to above-normal temperatures are expected on the East Coast over the next 5 days according to the ECMWF outlook. The 6-10 day outlook calls for below-normal temperatures across most of the country.
