Petroleum futures were seeing small losses in the overnight session on Thursday, after spending two sessions higher, amid losses in European equities and in US stock market index futures and strength in the US dollar index, despite bullish US crude oil inventory data from the American Petroleum Institute (API). Market participants awaited US economic news in the form of the ADP Employment report, weekly jobless claims, productivity and costs data, the ISM Services Index, and the weekly EIA inventory report for further direction.
The API reported a 5.40mb draw from US crude oil stockpiles for the week ended May 28, above expectations calling for a decrease of 2.87mb (average of polls by Reuters and S&P Global Platts). Data for distillates and gasoline were bearish as API showed a surprise build of 1.60mb in distillate stocks, while forecasts called for a decrease of 1.54mb, and the industry group reported a 2.50mb increase in gasoline inventories, whereas expectations called for a decline of 1.29mb. The more closely watched EIA report is due at 11:00am.
Asian stock markets closed mixed overnight with the Nikkei up 0.4%, while the Shanghai Composite fell 0.4% and the Hang Seng dropped 1.1%. The Japanese Markit Composite PMI fell from 51.0 to 48.8 last month. The Caixin China Composite PMI fell from 54.7 in April to 53.8 in May. In European news, the final Eurozone May Composite PMI (Markit) came in at 57.1, just above expectations at 56.9. The Composite PMI in France came in at 57.0, matching expectations, and the index for Germany came in at 56.2, also matching forecasts. The final UK May CIPS/Markit Composite PMI came in at 62.9, beating the Econoday consensus at 62.0. Despite mostly supportive economic data releases, the CAC 40 was down 0.6% as of this writing, the DAX had lost 0.7%, and the FTSE 100 had dropped 1.1%. US stock market index futures were seeing losses of between 0.6% (Dow f) and 0.9% (Nasdaq f) this morning. Also unsupportive for crude oil prices, the US dollar index was up 0.1%.
Petroleum futures settled higher yesterday amid gains in European equities, despite strength in the US dollar and mixed trade in US equities. Brent crude rose $1.10 to $71.35/bbl and WTI crude added $1.11, settling at $68.83/bbl. RBOB futures gained 2.37 cents to settle at $2.1941/g and ULSD (HO) settled 3.56 cents higher at $2.1071/g. According to Platts, the New York Harbor ULSD barge price differential weakened by 10 points to +0.10c/g, while HSHO and ULSHO differentials held steady at -31.65c/g and -21.75c/g, respectively. June propane prices rose along with crude yesterday. Per Platts, Mt. Belvieu LST prices rose 37.5 points to 91.750c/g and non-LST prices also added 37.5 points to 91.500c/g. Conway prices rose one cent to average 89.500c/g.
NYMEX natural gas futures fell 2.9 cents to $3.075/mmBtu on Wednesday, with a lower nuclear power outage rate and a looser US market balance expectation for next week. The EIA is due to release its natural gas storage report for the week ended May 28 this morning, and analysts polled by Reuters expect to see a 92bcf injection, which would be smaller than last year’s 103bcf increase and the 96bcf five-year average. The National Hurricane Center sees no tropical cyclone activity in the Atlantic over the next 48 hours.
