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Energy Market News
Petroleum futures were trading in the red in the overnight session on Thursday amid losses in European shares and mostly lower trade in US stock market index futures as well as a bearish comment by the IEA on the global oil demand recovery. Market participants awaited the October US Consumer Price Index and weekly jobless claims for further direction.
In the news the International Energy Agency (IEA) said that global oil demand will unlikely get a significant boost from the roll-out of vaccines against COVID-19 until well into 2021. Due to the holiday yesterday, the EIA is due to release its weekly inventory report today at 11:00am which is expected to show a 1.96mb draw from US crude oil stockpiles (average of polls by Reuters and S&P Global Platts). Draws from product stocks are also expected, 1.93mb from distillates and 0.43mb from gasoline stockpiles.
The PPI in Japan fell 0.2% last month which matched expectations. Japanese machinery orders fell 4.4% in September, while forecasts called for a 0.2% increase. Inflation is heating up in India as the CPI rose from 7.34% in September to 7.61% y/y in October, above expectations at 7.30% (Reuters poll). Industrial production in India rose 0.2% y/y in September, up from -7.4% in September and above expectations at -2.0%. The Nikkei added 0.7%, while the Shanghai Composite edged down 0.1% and the Hang Seng fell 0.2%. In European news, the Consumer Price Index rose 0.1% in Germany last month, matching expectations. Eurozone industrial production fell by 0.4% in September, while forecasts called for a 0.9% rise. Preliminary GDP for the UK for the third quarter showed a 15.5% increase, slightly below the Econoday consensus at 15.8. Monthly GDP for September rose by 1.1%, also missing forecasts at 1.5%. Industrial production in the UK rose 0.5% in September as expected. As of this writing, the FTSE 100 was down 1.0%, the DAX had lost 1.4% and the CAC 40 had dropped 1.6%. US stock market index futures were trading mixed this morning with Nasdaq futures up 0.1%, while S&P and Dow futures were down 0.5% and 0.9%, respectively. The US dollar index was trading flat as of this writing.
Crude futures strengthened on Wednesday amid gains in equities and news of a possible deepening of OPEC+ output cuts. WTI crude edged up 9 cents to settle at $41.45/bbl and Brent rose 19 cents to close at $43.80/bbl. RBOB futures fell 1.82 cents, settling at $1.1759/g, and ULSD (HO) settled at $1.2458/g, down 67 points. According to Platts, New York Harbor ULSHO barge differential to NYMEX weakened by 50 points to -9.75c/g. ULSD and HSHO barge differential held steady at -0.60c/g and -9.00c/g, respectively. November propane prices rose along with crude prices yesterday per Platts, as Mt. Belvieu LST prices strengthened by 75 points to 55.500c/g and non-LST prices rose by 1.125 cents to 56.000c/g. Conway spot prices added 87.5 points, reaching 54.625c/g.
NYMEX natural gas futures rose 8.2 cents to settle at $3.031/mmBtu on Wednesday amid a stronger two-week heating degree day forecast and a tighter market balance expectation for next week. The latest 1-5 day forecast (EC) still calls for above-normal temperatures on the East Coast but mostly below-normal temperatures are expected in the Midwest. The 6-10 day outlook sees below-normal temperatures on the East Coast but mostly above-normal temperatures in the Midwest. The EIA is due to release its natural gas storage report for the week ended November 6 this morning, expected to show a 9bcf withdrawal.