Petroleum futures were seeing small losses as of this writing in the overnight session on Tuesday following strong gains in the prior two sessions, despite mostly higher trade in US and European shares and new multi-month lows in the US dollar index. Market participants looked ahead to US housing market and consumer confidence data for further direction.
The Ifo business climate index for Germany strengthened more than expected this month, to 99.2 (consensus was 98.0), from a slightly downwardly-revised 96.6. Both the current conditions (95.7) and future expectations (102.9) components beat expectations. In unsupportive news, the contraction in first quarter German GDP was revised to 1.8% from a provisional estimate of 1.7%. Still, the DAX was up 0.68% and the CAC 40 was trading 0.14% higher as of this writing, while the FTSE 100 was off 0.07%. Futures for the major US stock market indexes were in the black, with Dow futures up 0.28%, S&P 500 futures up 0.36% and Nasdaq futures trading 0.59% stronger. Also supportive for crude, the US dollar index was down 0.24% and saw its weakest levels since January 7 this morning. Market participants looked ahead to the Case-Shiller Home Price Index for March, new home sales figures for April, and to the Conference Board’s consumer confidence index for May for further direction.
The complex strengthened for a second consecutive session on Monday, posting gains of over two percent, with crack spreads narrowing as gains in crude futures outpaced those seen on the product end of the barrel. Brent crude jumped $2.02 higher, closing at $68.46/bbl, and WTI jumped $2.47 higher to settle at $66.05/bbl amid weakness in the US dollar and strength in US and European shares, as well as a bullish note on oil demand from Goldman Sachs – despite the extension of a monitoring agreement between Iran and the IAEA. RBOB futures strengthened 4.92 cents, settling at $2.1177/g, and ULSD (HO) futures climbed 5.38 cents higher to settle at $2.0420/g. New York Harbor barge price differentials to NYMEX were steady yesterday, according to Platts, with differentials for ULSD, ULSHO, and HSHO holding at +0.00c/g, -21.50c/g, and -31.25c/g, respectively. May propane prices strengthened along with crude yesterday. Per Platts, Mt. Belvieu LST prices jumped 2.375 cents higher to 84.375c/g, and non-LST prices at the Texas hub strengthened 1.500 cents to 84.250c/g. Conway prices saw a smaller gain of 62.5 points, hitting 81.125c/g.
Natural gas futures traded on NYMEX lost 2 cents yesterday, settling at $2.886/mmBtu, with a lower nuclear power outage rate and loosening picture of the US market balance for this week (Refinitiv), although a stronger two-week cooling degree day forecast (GFS) may have helped limit the downside. As of this morning, no tropical cyclone activity is expected in the Atlantic over the next 48 hours by the National Hurricane Center.