Petroleum futures were seeing further losses in the overnight session on Wednesday amid a continued rise of coronavirus cases in Asia, with India reporting a new record increase in the daily death toll, bearish US crude oil inventory data from the American Petroleum Institute (API), and strength in the US dollar, despite gains in European shares. Market participants awaited the Canadian CPI, the Bank of Canada’s monetary policy announcement, and the weekly EIA inventory report for further direction.
The API reported a 0.44mb build in US crude oil stockpiles for the week ended April 16, while expectations called for a 3.69mb draw (average of polls by Reuters and S&P Global Platts). Data for distillates were bearish as API showed a rise of 0.66mb in distillate stockpiles, while forecasts called for a 1.13mb draw. On the other hand, the API figures were bullish for gasoline as the industry group reported a decrease of 1.60mb in gasoline inventories, while forecasts called for an increase of 0.63mb. The more closely watched EIA report is due at 10:30am. Reuters reports that Russian Deputy Prime Minister Alexander Novak said that the next week’s OPEC+ meeting may confirm or tweak output plans following its decision to ease production cuts earlier this month.
Asian stock markets closed flat to lower overnight with the Shanghai Composite steady, while the Hang Seng dropped 1.8% and the Nikkei lost 2.0%. In UK news, the Consumer Price Index rose 0.3% last month, matching expectations. The Producer Price Index (PPI) in the UK for the same month showed a 0.5% increase in output prices (expectations at 0.3%) and a 1.3% rise in input prices (consensus at 0.6%). The FTSE 100 was up 0.5% as of this writing, and the DAX and the CAC 40 were seeing gains of 0.2% and 0.7%, respectively. US stock market index futures were trading mixed near the unchanged mark this morning with futures for the Nasdaq down 0.13%, while Dow futures were up 0.04% and S&P 500 futures had edged up 0.07%. The US dollar index was up 0.1%, which is unsupportive for crude prices.
Petroleum futures weakened yesterday amid a surge in coronavirus cases in Asia, losses in equities, and strength in the US dollar. WTI crude fell 94 cents to settle at $62.44/bbl and Brent crude lost 48 cents to close at $66.57/bbl. RBOB futures weakened 2.71 cents, settling at $2.0174/g, and ULSD (HO) futures fell 1.24 cents to $1.8801/g. According to Platts, the New York Harbor ULSHO barge differential to NYMEX weakened by 25 points to -15.75c/g, while HSHO and ULSD barge differentials held steady at -25.75c/g and +0.10c/g, respectively. Also per Platts, propane prices fell along with crude prices on Tuesday as Mt. Belvieu non-LST prices fell one cent to 73.750c/g and LST prices lost 37.5 points to 73.625c/g. Conway spot prices fell by 75 points to 69.250c/g.
Natural gas futures fell 2.2 cents to settle at $2.727/mmBtu with a weaker two-week heating degree day forecast. The latest 1-5 day ECMWF outlook continues to see below-normal temperatures across the majority of the country with large deviations below normal temperatures seen in the Midwest. The 6-10 day forecast calls for mixed temperatures in both the Midwest and the Northeast.
