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Petroleum futures were extending their gains in the overnight session on Tuesday amid strength in European equities, despite mixed trade in US stock market index futures and gains in the US dollar, as well as continued spikes in new COVID-19 infections. Market participants looked ahead to the Job Openings and Labor Turnover Survey (JOLTS) for September for further direction.
Economic data from China were unsupportive. The Chinese Producer Price Index fell 2.1% year-on-year in October, while expectations called for a slightly smaller drop of 2.0%. The Chinese Consumer Price Index rose 0.5% y/y in October, below the Econoday consensus at 0.8%. The Shanghai Composite fell 0.4%, while the Nikkei rose 0.3% and the Hang Seng added 1.1%. Economic data from Europe were mixed. French industrial production growth of 1.4% in September topped expectations at 0.8%. On the other hand, Italian industrial production fell by 5.6%, while forecasts called for a 2.0% decline. The ZEW survey in Germany was mixed, as the current conditions index came in at -64.3, slightly above consensus at -65.0, but the economic sentiment index dropped further than expected, from 56.1 and past consensus at 40.0, to 39.0. Data on the UK labor market were mostly supportive. Claims fell by 29,800, while the Econoday consensus called for a 43,000 figure. The unemployment rate of 7.3% beat the 7.7% forecast, while the ILO unemployment rate for the third quarter of 4.8% matched expectations. European shares were trading in the black this morning with the DAX up 0.2%, the CAC 40 having added 1.1%, and the FTSE 100 having gained 1.4%. US stock market index futures were trading mixed as of this writing with S&P futures down 0.1% and Nasdaq futures having lost 1.4%, while Dow futures were up 0.8%. The US dollar index was up 0.1%, which is unsupportive for crude oil prices.
Petroleum futures rallied yesterday amid strength in equities, news of a possible extension of OPEC+ output cuts, and a progress in COVID-19 vaccine trial. WTI crude settled $3.15 higher at $40.29/bbl and Brent crude rose $2.95 to close at $42.40/bbl. RBOB futures gained 7.63 cents and settled at $1.1607/g and ULSD (HO) added 7.41 cents to $1.2167/g. According to Platts, New York Harbor ULSD barge differentials to NYMEX strengthened by 10 points to -0.25c/g, while ULSHO barge differential weakened by 75 points to -9.25c/g. November propane prices rose along with crude prices yesterday, per Platts, as Mt. Belvieu LST and non-LST prices both strengthened by 50 points to 56.250c/g and 56.375c/g, respectively. Conway spot prices rose 1.5 cents, reaching 55.250c/g.
Natural gas futures on NYMEX fell 2.9 cents, settling at $2.859/mmBtu on Monday amid a looser market balance expectation for this week and an unsupportive weather outlook. As of this morning the latest 1-5 day ECMWF outlook calls for well above-normal temperatures on the East Coast and mixed temperatures in the Midwest. The 6-10 and 11-15 day forecasts see mostly above-normal temperatures across the eastern half of the country.