Petroleum futures were trading in the red in the overnight session on Thursday, after a three-session rally, amid losses in European shares and mixed trade in US stock market index futures, as well as strength in the US dollar. Also unsupportive for oil prices, Pemex has recovered 71kb/d of production after more than 400kb/d of production was shut down due to a fire on an offshore platform on Sunday, according to Reuters. Market participants awaited US weekly jobless claims and the second estimate of second quarter US GDP growth for further direction.
Asian stock markets closed flat to lower as the Nikkei edged up 0.1%, while the Hang Seng and the Shanghai Composite both dropped 1.1% lower. The GfK German Consumer Climate Index for September fell from -0.4 to -1.2, missing the Econoday consensus at -1.0. On the other hand, the Business Climate Indicator Index in France for this month came in at 110, just above forecasts at 109. The Eurozone M3 money supply for July rose by 8.1% year-on-year, matching expectations. As of this writing, the CAC 40 and the FTSE 100 were both down 0.3%, while the DAX had lost 0.5%. US stock market index futures were trading mixed near the unchanged mark with futures for the Dow up 0.1%, while S&P 500 futures were steady and Nasdaq futures were off 0.2%. The US dollar index was up 0.1%, which is unsupportive for crude.
Petroleum futures rose for a third session yesterday amid strength in global equities and supportive weekly gasoline stock data from the EIA. Brent crude rose $1.20 to close at $72.25/bbl and WTI added 82 cents, settling at $68.36/bbl. Crack spreads narrowed as gains on the product end of the barrel were larger. RBOB futures rallied 12.0 cents to $2.3008/g and ULSD (HO) settled at $2.1182/g, up 5.14 cents. New York Harbor ULSD barge prices held steady against spot NYMEX HO at -0.15c/g, according to Platts. Meanwhile, the HSHO differential strengthened by 50 points to -29.75c/g, while the ULSHO differential weakened by one cent to -17.50c/g. The ULSD-ULSHO spread and biodiesel (D4) RIN prices tend to be positively correlated, and D4 RIN prices rose from 157 to 166 cents yesterday. Propane prices made opposite moves to crude and fell yesterday. Per Platts, Mt. Belvieu LST prices fell 87.5 points to 110.875c/g and non-LST prices lost 62.5 points to 110.750c/g. Conway prices weakened by 50 points to 113.250c/g. Inventory data from the EIA were neutral.
Natural gas futures edged up just 10 points yesterday to $3.897/mmBtu. The EIA is due to release its weekly natural gas storage report this morning, and is expected to show a 40bcf rise in storage levels for the week ended August 20 according to a Reuters poll of analysts. This would be smaller than both last year’s 45bcf injection and the 44bcf five-year average. According to the National Hurricane Center, there is a disturbance located about 150 miles south-southwest of Jamaica which has a 90% chance of tropical cyclone formation over the next 48 hours. There are two more disturbances in the open Atlantic that the NHC is tracking and they are both given a 40% chance of cyclone formation over the next two days.
