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NEWS
Petroleum futures were trading in the black in the overnight session on Monday amid a tanker explosion in Saudi Arabia, hopes on COVID-19 vaccines, gains in European shares and in US stock market index futures, as well as weakness in the US dollar. Market participants had a quiet day ahead of them on the economic calendar.
Reuters reports that shipping company Hafnia said that one of its oil tankers was hit by an unidentified “external source” that caused an explosion and a fire while the ship was discharging at Jeddah port in Saudi Arabia. Also supportive, cargo planes and trucks with the first US shipments of Pfizer/BioNTech's COVID-19 vaccine left FedEx and UPS hubs in Tennessee and Kentucky on Sunday en route to distribution points around the country. Inoculations could begin as early as today.
In economic news, Japan’s Tankan survey for the fourth quarter showed a decrease of 1.2% in capital expenditures, missing expectations at -0.1%. On the other hand, the survey showed an increase in the manufacturing index from -27 in the third quarter to -10 for large manufacturers (consensus at -15) and from -44 to -27 for small manufacturers (-36 was expected). The CPI in India rose 6.93% last month, down from 7.61% in October and below the Econoday consensus at 7.10%. Asian stocks closed mixed overnight with the Hang Seng down 0.4%, while the Nikkei added 0.3% and the Shanghai Composite rose 0.7%. In European news, Eurozone industrial production rose by 2.1% in October, beating forecasts at 2.0%. European shares were trading in the black this morning with the FTSE 100 up 0.4%, the CAC 40 having gained 1.1%, and the DAX having added 1.3%. As of this writing, US stock market index futures were seeing gains of between 0.6% (Nasdaq f) and 0.9% (Dow f). Also supportive for crude oil prices, the US dollar index was down 0.5%.
The complex settled flat to lower on Friday amid losses in equities, strength in the US dollar index, a rise of 12 in the US oil rig count. WTI crude edged down 21 cents to settle at $46.57/bbl and Brent crude fell 28 cents to close at $49.97/bbl. RBOB futures lost 89 points to $1.3077/g, while ULSD (HO) futures edged up 12 points to $1.4369/g. According to Platts, New York Harbor ULSHO barge differentials to NYMEX weakened by 25 points to -9.00c/g. HSHO and ULSD barge differentials held steady at -15.30c/g and -0.50c/g, respectively. Also per Platts, December propane prices fell along with crude prices on Friday as Mt. Belvieu LST prices fell by 75 points to 58.875c/g and non-LST prices weakened by 50 points to 59.500c/g. Conway spot prices fell by 87.5 points, averaging 55.000c/g.
NYMEX natural gas futures rose 3.8 cents to settle at $2.591/mmBtu on Friday amid a tighter market balance expectation for this week and a stronger two-week heating degree day forecast. The latest 1-5 day forecast (EC) calls for below-normal temperatures in the Northeast, but mixed and mostly below-normal temperatures are expected in the Midwest. The 6-10 day outlook is less supportive with above-normal temperatures expected across the majority of the country, save for some parts of the East Coast.