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NEWS
Petroleum futures were strengthening further in the overnight session on Wednesday amid weakness in the US dollar, despite mixed trade in US stock market index futures and losses in European equities, as well as bearish US crude oil inventory data from the American Petroleum Institute (API). It was a quiet morning on the economic calendar with market participants looking ahead to US data in the form of durable goods orders, GDP, weekly initial jobless claims, new home sales, and the University of Michigan Consumer Sentiment Index for further direction.
The API reported a 3.80mb build in US crude oil stockpiles for the week ended November 20, while expectations called for a smaller build of 0.19mb (average of polls by Reuters and S&P Global Platts). Data for distillates were supportive as API showed a 1.80mb drop in distillate stocks, against forecasts (Reuters poll) calling for a smaller decline of 1.59mb, whereas figures were bearish for gasoline as the industry group reported a build of 1.30mb in gasoline inventories, well above expectations calling for a 0.61mb increase. Cushing, OK crude oil inventories fell by 1.40mb last week, per API. The more closely watched EIA report is due at 10:30am.
Asian stock markets closed mixed overnight with the Hang Seng up 0.3% and the Nikkei adding 0.5%, while the Shanghai Composite fell 1.2%. European shares were trading in the red this morning with the CAC 40 and DAX both down 0.2%, while the FTSE 100 had lost 0.6%. As of this writing, US stock market index futures were trading mixed near the unchanged mark as Nasdaq futures were up 0.2%, whereas S&P 500 futures were trading flat and Dow futures were down 0.1%. The US dollar index continued its slide and was down 0.1%, which is supportive for crude oil prices.
Petroleum futures rallied yesterday amid gains in equities, weakness in the US dollar, and news that the Trump administration has given Biden access to resources that will enable him to take over the office in January. WTI crude settled $1.85 higher at $44.73/bbl and Brent crude rose $1.80 to close at $47.86/bbl. RBOB futures gained 5.42 cents and settled at $1.2582/g and ULSD (HO) added 4.90 cents to $1.3595/g. According to Platts, New York Harbor ULSD barge differentials to NYMEX strengthened by 20 points to +0.30c/g, while HSHO and ULSHO barge differentials held steady at -15.00c/g and -7.90c/g, respectively. November propane prices rallied along with crude prices yesterday, per Platts, as Mt. Belvieu LST prices jumped 1.125 cents to 53.750c/g and non-LST prices rose by one cent to 54.250c/g. Conway spot prices added 1.5 cents, averaging at 51.750c/g.
NYMEX natural gas futures rose 6.4 cents to settle at $2.775/mmBtu on Tuesday 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) calls for above-normal temperatures across the eastern half of the country. The 6-10 day outlook sees above-normal temperatures in the Northeast, but mixed temperatures in the Midwest. The EIA is due to release its weekly natural gas storage report this morning, expected to show an 18bcf withdrawal for the week ended November 20.