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Petroleum futures were strengthening further in the overnight session on Wednesday amid bullish US crude oil inventory data from the American Petroleum Institute (API) and gains in European shares and in US stock market index futures, despite a bearish revision to the 2021 global oil demand forecast by OPEC and strength in the US dollar. It was a quiet morning with a quiet day ahead on the economic calendar.
The API reported a 5.10mb draw from US crude oil stockpiles for the week ended November 6, while expectations called for a smaller decline of 1.96mb (average of polls by Reuters and S&P Global Platts). Data for distillates and gasoline were bullish as API showed a 5.60mb drop in distillate stocks, while forecasts called for decline of 1.93mb, and the industry group reported a larger than expected draw of 3.30mb from gasoline inventories, compared to expectations calling for a 0.43mb dip. Cushing, OK crude oil inventories fell by 1.20mb last week, per API. The more closely watched EIA report will be delayed to Thursday due to today’s holiday. OPEC released its monthly report in which it said that global demand will rise by 6.25mb/d to 96.26mb/d in 2021, while previous forecast called for a larger increase of about 6.55mb/d. This cut in the global oil demand growth forecast is mainly due to a rising number of coronavirus cases.
Asian stock markets closed mixed overnight with the Hang Seng down 0.3% and the Shanghai Composite losing 0.5%, whereas the Nikkei added 1.8%. European shares were trading in the black this morning with the DAX up 0.5%, the CAC 40 having gained 0.6%, and the FTSE 100 having climbed 1.0% higher. As of this writing, US stock market index futures were seeing gains of between 0.7% (Dow f) and 1.2% (Nasdaq f). In unsupportive news, the US dollar index was up 0.4%.
Petroleum futures rose across the board yesterday amid gains in European equities, despite mostly lower trade in US shares and a bearish revision to the 2020 global oil demand forecast in the EIA’s STEO. WTI crude settled $1.07 higher at $41.36/bbl and Brent crude rose $1.21 to close at $43.61/bbl. RBOB futures gained 3.34 cents and settled at $1.1941/g and ULSD (HO) added 3.58 cents to $1.2525/g. According to Platts, New York Harbor ULSD barge differentials to NYMEX weakened by 35 points to -0.60c/g, while HSHO barge differential strengthened by two cents to -9.00c/g. November propane prices fell yesterday, per Platts, as Mt. Belvieu LST and non-LST prices both fell by 1.5 cents to 54.750c/g and 54.875c/g, respectively. Conway spot prices also lost 1.5 cents, averaging at 53.750c/g.
NYMEX natural gas futures rose 9 cents to settle at $2.949/mmBtu on Tuesday amid a stronger two-week heating degree day forecast and a tighter market balance expectation for next week. The latest 1-5 day forecast (EC) calls for above-normal temperatures on the East Coast, but near to below-normal temperatures in the Midwest. The 6-10 day outlook sees near normal temperatures on the East Cost, but above-normal temperatures in the Midwest.