Petroleum futures were just north of the unchanged mark as of this writing in the overnight session on Tuesday, with the declaration of force majeure at a Libyan oil port likely supporting, whereas weakness in equities was unsupportive. Market participants had a quiet day on the economic calendar before them, and would have to look elsewhere for further direction.
Reuters reports that the National Oil Corp in Libya has once again declared force majeure on exports from the port of Hariga, and that it may do so for other ports due to a budget dispute with the Libyan central bank. NOC says the Central Bank of Libya has not been providing Arabian Gulf Oil Co, the subsidiary running Hariga, with its budget since September.
Asian stock markets mostly fell overnight with concern over the surge in the pandemic and new and possible lockdown measures. Japan may reinstate measures in major cities, and Hong Kong is suspending flights from India, Pakistan, and the Philippines for two weeks. The Nikkei dropped 1.97%, and the Shanghai Composite slipped 0.13% lower, but the Hang Seng added 0.13%. The Asia Dow lost 0.92%. European shares were also falling this morning, despite encouraging economic data releases. German producer price inflation was stronger than expected last month, per a 3.7% year-on-year rise in the Producer Price Index, compared to expectations at 3.2%. Nevertheless, the DAX was down 0.77% as of this writing, and the FTSE 100 had lost 1.03% despite stronger than expected UK labor market data. The claimant count was just 10,100 in March, far below consensus at 150,000. The claimant count unemployment rate for February was revised down by 0.2 percentage points to 7.3% and held there in March, against expectations for a rise to 7.9%. The CAC 40 was down 1.29% this morning. US stock market index futures were also in the red, but losses were smaller at between 0.3% and 0.4%. The US dollar index was flat.
Crude oil futures edged up on Monday, while refined products settled mixed but also near the unchanged mark. Weakness in the US dollar was a supportive factor for crude, whereas weakness in equities amid alarm over rising coronavirus case counts likely helped limit gains. Brent crude added 28 cents, closing at $67.05/bbl, and WTI saw a similar gain of 25 cents, settling at $63.38/bbl. RBOB edged up 46 points for a $2.0445/g settlement, while ULSD (HO) shed 32 points to settle at $1.8925/g. In the New York Harbor cash market, the ULSD and ULSHO barge price differentials to NYMEX HO weakened yesterday, by 15 points and 25 points, respectively, to +0.10c/g and -15.50c/g. Also according to Platts, the HSHO differential held steady at -25.75c/g. April propane prices continued to sell off yesterday, with Mt. Belvieu non-LST prices dropping 4.375 cents to 74.750c/g, LST prices at the hub falling 3.875 cents to 74.000c/g, and Conway prices losing 3.000 cents to hit 70.000c/g. A Platts source noted that the sharp decline in prompt prices represented the market “doing its job” of correcting for backwardation in a low-demand environment.
NYMEX natural gas futures strengthened 6.9 cents to settle at $2.749/mmBtu yesterday with a tightening forecast for this week’s US market balance (Refinitiv) and above-normal heating degree day expectations for the next two weeks (GFS). As of this morning, the latest 1-5 day ECMWF outlook is supportive, with well-below-normal temperatures expected across much of the central part of the country, and below-normal temperatures expected across most of the East Coast, save for parts of coastal New England. The 6-10 day forecast is less supportive, calling for more mixed, near-normal temperatures in the Midwest and Northeast.
