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NEWS
Petroleum futures were trading in the black in the overnight session on Wednesday amid gains in European equities, mostly higher trade in US stock market index futures, weakness in the US dollar index, and news that the UK began mass vaccinations yesterday, despite bearish US crude oil inventory data from the American Petroleum Institute (API). Market participants looked ahead to the US Job Openings and Labor Turnover Survey (JOLTS) for October, the Bank of Canada’s monetary policy announcement, and the weekly EIA inventory report for further direction.
The API reported a 1.14mb build in US crude oil stockpiles for the week ended December 4, while forecasts called for a 1.42mb draw (Reuters poll). Data for distillates were unsupportive as API showed a 2.32mb rise in distillate stocks, above forecasts at 1.41mb. Figures for gasoline stockpiles were bearish as the agency reported a 6.44mb rise in stocks, well above expectations calling for a 2.27mb increase. Cushing, OK crude oil inventories fell by 1.80mb last week, per API. The more closely watched EIA report is due at 10:30am.
Economic data releases from Asia were mixed. Japanese machinery orders rose 2.8% y/y in October, while forecasts called for an 11.6% drop. The Chinese Producer Price Index fell 1.5% y/y in November, above expectations at -1.8%. On the other hand, the Consumer Price Index in China fell 0.5% y/y last month, while the Econoday consensus called for a 0.8% increase in consumer prices. The Shanghai Composite closed 1.1% lower, while the Hang Seng rose 0.8% and the Nikkei added 1.3%. In European news, the German merchandise trade surplus widened from E17.6bn in September to E18.2bn in October, beating consensus at E18.0bn. European shares were trading in the black this morning with the CAC 40 and the FTSE 100 both up 0.3%, while the DAX had gained 0.9%. As of this writing, US stock market index futures were trading flat to higher with Nasdaq futures down 0.1%, whereas S&P 500 futures were up 0.1% and Dow futures were trading 0.3% higher. The US dollar index was down 0.1%, which is supportive for crude oil prices.
Petroleum futures settled mixed near the unchanged mark yesterday with an uptick in the US dollar, mixed trade in European shares, and a bearish revision to the 2020 global oil demand forecast by the EIA likely weighing, while strength in US equities and news that the first person in UK has received a COVID-19 vaccine were supportive. WTI crude settled 16 cents lower at $45.60/bbl, while Brent crude edged up 5 cents to close at $48.84/bbl. RBOB futures edged up one point and settled at $1.2559/g and ULSD (HO) added 75 points to $1.4067/g. According to Platts, New York Harbor ULSHO barge differentials to NYMEX strengthened by one cent to -7.50c/g, while ULSD and HSHO barge differentials held steady at -0.30c/g and -15.30c/g, respectively. Propane prices mostly fell yesterday, per Platts, as Mt. Belvieu LST prices dropped 1.375 cents to 58.125c/g, while non-LST prices remained steady at 59.500c/g. Conway spot prices weakened by 75 points, averaging 55.250c/g.
NYMEX natural gas futures edged down 70 points to settle at $2.399/mmBtu on Tuesday amid a weaker two-week heating degree day forecast. The latest 1-5 day forecast (EC) calls for above-normal temperatures across the majority of the country. The 6-10 day outlook sees mixed but mostly below-normal temperatures in the Midwest, while near-normal temperatures are expected in the Northeast.