Crude oil and refined products futures were seeing further modest gains of between 0.3% (ULSD) and 1.2% (WTI) as of this writing in the overnight session on Tuesday, amid mostly higher trade in equities on a quiet morning on the newswires. The US dollar index was flat, and market participants looked ahead to the US NAHB Housing Market Index for January and to the Bank of Canada’s monetary policy announcement for further direction. Weekly EIA petroleum inventories are delayed to Friday due to the holiday on Monday and the inauguration today.
President-elect Biden is to be inaugurated today and is expected to sign executive orders revoking a permit granted by the Keystone XL oil pipeline project by the previous administration, and another to begin the process of re-joining the Paris climate accords. He has also said he would put the country on a path towards net-zero emissions by 2050.
Asian shares mostly strengthened overnight. The Shanghai Composite rose 0.5% and the Hang Seng jumped 1.1% higher. While the Nikkei fell 0.4%, the Asia Dow rose 0.4%. In European news this morning, the Harmonized Index of Consumer Prices (HICP) for the Eurozone rose 0.3% last month, as expected. The Narrow Core price level rose 0.4%, also matching expectations. There was also consumer price inflation in the UK, where the CPI rose 0.3% last month, as expected. As of this writing, the FTSE 100 was off 0.1% but the CAC 40 was up 0.3% and the DAX had gained 0.5%. Futures for the major US stock market indexes were in the black, with gains of between 0.1% (Dow futures) and 0.8% (Nasdaq futures).
Petroleum futures posted gains of between 0.4% (ULSD) and 2.1% (Brent) yesterday with weakness in the US dollar and strength in US shares, despite weakness in European equities and a bearish IEA oil demand forecast revision. Brent crude gained $1.15, closing at $55.90/bbl, and WTI added 62 cents to settle at $52.98/bbl. RBOB futures settled 97 points stronger at $1.5381/g and ULSD (HO) futures settled at $1.5987/g for a gain of 58 points. New York Harbor ULSD and ULSHO barge price differentials to NYMEX weakened yesterday, according to Platts. The ULSD barge differential fell by 50 points to -0.35c/g and ULSHO differential softened by 40 points to -10.25c/g. HSHO barges held at 15.75c/g under spot NYMEX. Propane prices reversed course and took a tumble yesterday. Per Platts, Non-LST prices at Mt. Belvieu dropped 5.000 cents lower to 87.500c/g, LST prices at the hub tumbled 6.000 cents lower to 89.000c/g, and Conway prices crashed 9.500 cents to hit a midpoint of 95.000c/g. A Platts market source pointed out that prices in Asia fell further between Friday and yesterday, narrowing the arb into cancellation territory. Sources said as many as eight cargos could be cancelled or deferred this month.
Natural gas futures on NYMEX dropped 19.1 cents yesterday, settling at $2.546/mmBtu with unsupportive shifts to the temperature outlook and the US market balance forecast. As of this morning, the latest ECMWF 1-5 day outlook calls for mixed, near-normal temperatures in the Northeast but mostly above-normal temperatures in the Midwest. The 6-10 day forecast remains slightly unsupportive for the Midwest, but below-normal temperatures are expected for most of the Northeast (excepting Maine).
