Petroleum futures were seeing gains of over two percent in the overnight session on Tuesday amid gains in global equities, mostly supportive economic data out of Asia and Europe, and weakness in the US dollar. Reuters reports that OPEC+ is likely to stick to the existing plan to gradually increase oil production at a meeting today, according to three OPEC sources. Market participants awaited US data in form of the Markit Manufacturing PMI, the ISM Manufacturing Index and construction spending, as well as Canadian GDP for further direction.
The Jibun Bank Manufacturing PMI for Japan rose from 52.5 to 53.0 in May, indicating a stronger expansion in the sector. The Caixin Manufacturing PMI was a beat as the index came in at 52.0, beating forecasts at 51.9. The Shanghai Composite rose 0.26% and the Hang Seng shot up 1.08%, while the Nikkei weakened 0.16%. In European news, the final Markit Manufacturing PMI for the Eurozone came in at 63.1, above consensus at 52.8. The index for Germany also beat expectations by coming in at 64.4 (vs. 64.0), and the French PMI came in at 59.4, topping forecasts at 59.2. The Flash Harmonized Index of Consumer Prices (HICP) in the Eurozone rose by 2.0% y/y in May, above the Econoday consensus at 1.9. The unemployment rate in the Eurozone came in at 8.0%, below expectations at 8.1%. The unemployment rate in Germany remained steady at 6.0%, as expected. In UK news, the final CIPS/Markit Manufacturing PMI for last month came in at 65.6, below consensus at 66.1. European shares were trading in the black this morning with the CAC 40 up 1.03%, the FTSE 100 having added 1.20%, and the DAX having gained 1.60%. As of this writing, US stock market index futures were seeing gains of between 0.4% (Nasdaq f) and 0.7% (Dow f). Also supportive for crude oil prices, the US dollar index was down 0.2%.
The complex settled mixed but mostly lower on Friday ahead of the holiday weekend, with a rise in the US oil rig count likely weighing, while gains in global equities were supportive. Brent crude edged up 17 cents, closing at $69.63/bbl, while WTI lost 53 cents, settling at $66.32/bbl. RBOB futures settled 1.16 cents weaker at $2.1402/g and ULSD (HO) settled at $2.0445/g, down 1.19 cents. According to Platts, the New York Harbor HSHO barge price differential to spot NYMEX HO weakened by 40 points to -31.65c/g on Friday, while ULSD and ULSHO differentials strengthened by 30 points each to +0.40c/g and -20.95c/g, respectively. According to Platts, Mt. Belvieu non-LST prices rose 62.5 points to 88.500c/g and LST prices at the hub strengthened 1.125 cents to 89.375c/g. Meanwhile, Conway prices dropped 2.000 cents to 83.500c/g.
Natural gas futures rose 2.8 cents on Friday, settling at $2.986/mmBtu amid a stronger two-week cooling degree day forecast, a tighter US market balance expectation for this week and a drop of one in the US rig count. The National Hurricane Center sees no tropical cyclone activity in the Atlantic over the next 48 hours.
