Petroleum futures were seeing losses of over one and a half percent in the overnight session on Wednesday amid a continued rise in coronavirus cases in Asia, unsupportive US crude oil inventory data from the American Petroleum Institute (API), losses in European equities and in US stock market index futures, and strength in the US dollar. Market participants awaited the Canadian CPI, the weekly EIA inventory report, and the US FOMC policy announcement for further direction.
The API reported a 0.62mb build in US crude oil stockpiles for the week ended May 14, while expectations called for a decrease of 0.64mb (average of polls by Reuters and S&P Global Platts). Data for distillates and gasoline were bullish as API showed a 2.60mb draw from distillate stocks, above forecasts calling for a decrease of 0.29mb, and the industry group reported a 2.80mb draw from gasoline inventories, whereas expectations called for a smaller decline of 0.14mb. The more closely watched EIA report is due at 10:30am. Reuters reports that Russian Deputy Prime Minister Alexander Novak said that there is an oil deficit in the global market which is helping to reduce excess oil stocks left from last year, even though some countries are recording a growing number of COVID-19 cases.
Asian stock markets closed mixed overnight with the Hang Seng up 1.4%, while the Shanghai Composite fell 0.5% and the Nikkei dropped 1.3%. In European news this morning, the Harmonized Index of Consumer Prices (HICP) for the Eurozone rose 0.6% last month, as expected. The Narrow Core price level rose 0.5%, just shy of expectations at 0.6%. The CAC 40 and the DAX were seeing losses of 1.5% and 1.7%, as of this writing. In UK news, the Consumer Price Index rose 0.6% in April, above expectations at 0.5%. The Producer Price Index (PPI) in the UK for the same month showed a 0.4% increase in output prices (matching expectations) and a 1.2% rise in input prices (consensus at 0.6%). The FTSE 100 was down 1.4% this morning. US stock market index futures were seeing similar losses of between 0.9% (Dow f) and 1.6% (Nasdaq f) as of this writing. Also unsupportive for crude oil prices, the US dollar index was up 0.3% after falling for three sessions.
Petroleum futures closed flat to lower yesterday, with crack spreads narrowing as losses in crude futures were larger, amid mixed trade in US and European shares, despite weakness in the US dollar. WTI crude fell 78 cents to settle at $65.49/bbl and Brent crude lost 75 cents to close at $68.71/bbl. RBOB futures edged up 25 points, settling at $2.1609/g, while ULSD (HO) futures edged down 40 points to $2.0564/g. According to Platts, New York Harbor ULSD and ULSHO barge differentials to NYMEX weakened by 10 points and 25 points to +0.00c/g and -20.25c/g, respectively, while the HSHO barge differential held steady at -31.25c/g. Also per Platts, May propane prices made mixed moves on Tuesday as Mt. Belvieu non-LST prices rose 50 points to 82.500c/g and LST prices strengthened 37.5 points to 83.000c/g, while Conway spot prices fell by 12.5 points to 80.500c/g.
Natural gas futures fell 9.7 cents to settle at $3.012/mmBtu amid a looser market balance expectation for next week. The National Hurricane Center sees no tropical cyclones in the Atlantic in the next 48 hours.
