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NEWS
Petroleum futures were trading in the red in the overnight session on Monday amid tensions between the US and China, mostly lower trade in European equities and losses in US stock market index futures, as well as strength in the US dollar. Market participants awaited the Canadian Ivey PMI for further direction.
Reuters reports that the US is preparing to impose sanctions on at least a dozen Chinese officials over their alleged role in Beijing’s disqualification of elected opposition legislators in Hong Kong, including a US official familiar with the matter, according to three sources. Also in the news, Iran has instructed its oil ministry to prepare installations for the production and sale of crude oil at full capacity within three months, ahead of a possible easing of US sanctions after President-elect Joe Biden takes office, according to state media. Saudi Arabia's state oil company raised its monthly Arab light crude prices for January to Asia to $0.30/bbl, up $0.80 from December. Aramco has also set its January OSP prices to the US at a premium of $0.55/bbl over the Argus Sour Crude Index, down $0.30 from December. Aramco also set its OSP for Arab light crude oil to Northwestern Europe to minus $1.40/bbl versus ICE Brent.
Asian stock markets weakened overnight with the Nikkei and the Shanghai Composite down 0.8%, while the Hang Seng dropped 1.2%. German industrial production rose by 3.2% in October, beating consensus at 0.7%. The UK Halifax House Price Index was also a beat as home prices rose 1.2% last month, above forecasts at 0.5%. Despite largely supportive economic data, European shares were trading mixed and mostly lower this morning with the DAX down 0.4% and the CAC 40 having lost 0.9%, while the FTSE 100 was up 0.3%. As of this writing, US stock market index futures were seeing losses of between 0.1% (Nasdaq f) and 0.4% (Dow f, S&P f). Also unsupportive for crude oil prices, the US dollar index was up 0.3%.
Petroleum futures strengthened on Friday amid strength in equities and weakness in the US dollar index, despite a rise of 5 in the US oil rig count. WTI crude rose 62 cents to settle at $46.26/bbl and Brent crude added 54 cents to close at $49.25/bbl. RBOB futures rose 68 points to $1.2685/g and ULSD (HO) futures gained 97 points to $1.4030/g. According to Platts, New York Harbor ULSD and ULSHO barge differentials to NYMEX strengthened by 25 points each to -0.30c/g and -8.50c/g, respectively. The HSHO barge differential held steady at -15.30c/g. Also per Platts, December Mt. Belvieu propane prices rose along with crude prices on Friday as LST prices rose by 25 points to 59.250c/g and non-LST prices strengthened by 12.5 points to 59.500c/g. On the other hand, Conway spot prices fell by 12.5 points, averaging 55.375c/g.
NYMEX natural gas futures rose 6.8 cents to settle at $2.575/mmBtu on Friday amid a tighter market balance expectation for next week. The latest 1-5 day forecast (EC) calls for above-normal temperatures in the Midwest, but mostly below-normal temperatures in the Northeast. The 6-10 and 11-15 day outlooks are less supportive with above-normal temperatures expected across the majority of the country.