Petroleum futures were seeing further gains in the overnight session on Wednesday amid gains in European shares and a supportive comment regarding global oil demand by Goldman Sachs, despite losses in US stock market index futures, continued strength in the US dollar, and bearish US crude oil inventory data from the American Petroleum Institute (API). Market participants awaited US international trade in goods data, Canadian retail sales, the weekly EIA inventory report, as well as the US FOMC policy announcement for further direction.
The API reported a 4.32mb build in US crude oil stockpiles for the week ended April 23, while expectations called for a smaller increase of 0.23mb (average of polls by Reuters and S&P Global Platts). Data for distillates and gasoline were supportive as API showed a 2.40mb draw from distillate stocks, while forecasts called for a decrease of 0.92mb, and the industry group reported a surprise draw from gasoline inventories of 1.20mb, whereas expectations called for a small build of 0.25mb. The more closely watched EIA report is due at 10:30am. In the news, Goldman Sachs said that it expects “the biggest jump in oil demand ever, a 5.2mb/d rise over the next six months” due to an expected increase of vaccination campaigns across Europe and a rise in travel demand. The bank said that an easing of international travel restrictions in May would increase jet fuel demand by 1.5mb/d. Also in the news, Reuters reports that Saudi Arabia’s crown prince announced that the kingdom is in discussions to sell 1% of Saudi Aramco to a leading global energy company.
Japanese retail sales rose 5.2% last month, up from a 1.5% decline in February. The Nikkei closed 0.21% higher, while the Shanghai Composite added 0.42% and the Hang Seng rose 0.45%. In European news, the GfK German Consumer Climate index for May fell from an upwardly-revised -6.1 to -8.8, while the Econoday consensus called for a rise to -3.8. As of this writing, the DAX was up 0.4%, the FTSE 100 had added 0.5%, and the CAC 40 was trading 0.6% higher. On the other hand, US stock market index futures were seeing flat to lower trade this morning with futures for the S&P 500 steady, while Nasdaq and Dow futures were both down 0.2%. Also unsupportive for crude oil prices, the US dollar index was up 0.1%.
Petroleum futures strengthened yesterday with gains of over one percent amid another attack in Saudi Arabia, near the Red Sea port of Yanbu, despite losses in equities and strength in the US dollar. WTI crude rose $1.03 to settle at $62.94/bbl and Brent crude gained 77 cents to close at $66.42/bbl. RBOB futures added 4.18 cents, settling at $2.0204/g, and ULSD (HO) futures rose 2.72 cents to $1.9057/g. According to Platts, the New York Harbor ULSHO barge differential to NYMEX weakened by 75 points to -17.000c/g, while HSHO and ULSD barge differentials held steady at -25.75c/g and +0.10c/g, respectively. Also per Platts, April propane prices rose along with crude prices on Tuesday as Mt. Belvieu non-LST prices jumped 4.25 cents to 84.000c/g and LST prices added 1.875 cents to 80.125c/g. Conway spot prices rose by 2.50 cents to 76.500c/g.
Natural gas futures rose 8.3 cents to settle at $2.873/mmBtu despite a weaker two-week total degree day forecast and a looser market balance expectation for next week. The National Hurricane Center sees no tropical cyclones in the Atlantic in the next 48 hours.
