Crude futures were seeing losses of over two percent in the overnight session on Thursday, ending a four-session gaining streak, amid weakness in global shares, strength in the US dollar, and the resumption of some flows on the Colonial Pipeline system. Market participants looked ahead to US labor market and price level data for further direction.
Colonial Pipeline says that it is slowly restarting its computer-controlled pipeline network after a six-day outage due to a ransomware cyberattack. The company says it could take several days to return to normal operations and that interruptions are possible. In related news from Reuters, a Jones Act waiver has been issued to an individual company, allowing it to transport fuel on a non-US-flagged ship from the Gulf Coast to the East Coast.
Asian shares saw fairly heavy losses overnight, with the Shanghai Composite falling 0.96%, the Hang Seng dropping 1.81%, and the Nikkei tumbling 2.49% lower. European shares were falling this morning, with the CAC 40 down 0.99%, the DAX having lost 1.25%, and the FTSE 100 dropping 2.04%. US stock market index futures were mixed. Dow futures were down 0.30% and S&P 500 futures were off 0.02%, but Nasdaq futures were up 0.36% as of this writing. The US dollar index was off of earlier highs, up 0.04%. Market participants were looking to weekly US jobless claims figures (expected at 475,000) and the Producer Price Index – Final Demand (PPI-FD) for April (expected to rise 5.9% year-on-year) for further direction.
The complex posted gains for a fourth session on Wednesday, following a bullish IEA monthly oil market report and strength in European shares, despite strength in the US dollar and losses in US equities, as well as bearish US crude stock data. Brent rose 77 cents to $69.32/bbl and WTI gained 80 cents to settle at $66.08/bbl. EIA showed an as-expected dip in distillate stocks, but the draw was centered on the East Coast, a supportive detail. ULSD futures strengthened 2.78 cents, settling at $2.0695/g, and RBOB futures settled at $2.1610/g, up 2.11 cents. According to Platts, ULSHO barge prices weakened by 75 points against spot NYMEX, putting the differential at -19.25c/g. Meanwhile, the ULSD and HSHO differentials held steady at +1.00c/g and -26.00c/g, respectively. May propane prices strengthened yesterday. Mt. Belvieu LST prices rose 75 points to 81.250c/g and non-LST prices increased by one cent to 80.625c/g. Also according to Platts, Conway prices climbed 75 points higher to 79.250c/g.
Natural gas futures on NYMEX added 1.4 cents, settling at $2.969/mmBtu on Wednesday, despite a weaker two-week degree day forecast and looser US market balance expectation for next week. All is quiet in the Atlantic, with the National Hurricane Center expecting no tropical cyclone formation over the next 48 hours. The EIA is due to release its weekly natural gas storage report this morning at 10:30, and analysts polled by Reuters see a 76bcf injection for the week ended May 7. This would be below the 82bcf five-year average and well below last year’s 104bcf build.
