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NEWS
Crude futures prices were falling in the overnight session on Tuesday, adding to Monday’s losses – which ended a three-session rally. Weakness this morning came amid losses in global equities and an uptick in the US dollar index, with mixed but mostly unsupportive European economic data releases. Market participants looked ahead to data on the Canadian housing market and US productivity and costs for further direction.
Asian shares fell overnight, with the Nikkei slipping 0.3% lower, the Shanghai Composite shedding 0.2%, and the Hang Seng dropping 0.8%. The final estimate of third quarter Eurozone GDP growth came in at 12.5%, a surprise 0.1 percentage point downward revision from the previous estimate. However, the second quarter contraction was revised up by 0.1pp to 11.7%. Also unsupportive, the ZEW Survey in Germany indicated that the view on current conditions (index at -66.5) is weaker than expected (-66.0). In more encouraging news, the French merchandise trade deficit narrowed to E4.85bn in October, from E5.59bn the previous month. As of this writing, the CAC 40 was down 0.7% and the DAX had slipped 0.3% lower. The FTSE 100 in the UK was down 0.4% despite news that the country had begun mass vaccinations for COVID-19 with the Pfizer/BioNTech drug, starting with a 90-year old woman. US stock market index futures were also in the red, with Nasdaq futures down 0.4% and futures for both the Dow and the S&P 500 down 0.5%. Also unsupportive for crude prices, the US dollar index was up 0.1%, continuing to rise off of recent multi-year lows.
The complex snapped a three-sessional rally on Monday, as European shares fell despite encouraging economic data releases, and as US stock market indexes saw flat-to-lower trade during the hours of the NYMEX session. US-China tensions likely also weighed on the price action. WTI crude fell 50 cents to settle at $45.76/bbl, and Brent crude lost 46 cents for a $48.79/bbl close. On the product end of the barrel, RBOB futures fell 1.27 cents, settling at $1.2558/g, and ULSD (HO) settled just 38 points weaker at $1.3992/g. The New York Harbor cash market was steady according to Platts, with ULSD, ULSHO, and HSHO barge price differentials to NYMEX holding at -0.30c/g, -8.50c/g, and -15.30c/g. Spot propane prices were flat to higher yesterday, according to Platts. Prompt non-LST prices at Mt. Belvieu held at 59.50c/g, while LST prices strengthened 25 points to 59.500c/g and Conway spots climbed 62.5 points higher to 56.000c/g.
Natural gas futures traded on NYMEX, following a pause on Friday, extended their decline with a 16.9-cent tumble yesterday. Futures settled at $2.406/mmBtu, with a weaker heating degree day outlook. The latest 1-5 day ECMWF outlook sees mixed temperatures along the eastern seaboard, but above-normal temperatures elsewhere, with particularly large deviations above normal in the Midwest. Both the Midwest and the Northeast are expected to see above-normal temperatures in the 6-10 and 11-15 day periods.