Crude oil and refined products futures were seeing small losses in the overnight session on Thursday following bearish US crude oil inventory figures from the American Petroleum Institute (API), despite mixed but mostly higher trade in equities and weakness in the US dollar index. Market participants were looking ahead to US housing starts and permits, weekly initial jobless claims, the January Philadelphia Fed Manufacturing Index, and to flash Eurozone consumer confidence for January for further direction.
The API reported a surprise 2.60mb build in commercial crude oil inventories for the week ended January 15, against expectations for a 1.17mb draw per a Reuters poll of analysts. Data for gasoline were supportive, as API reported a build of 1.10mb, whereas analysts expected a larger build of 2.8mb. Distillate inventory figures were neutral, as API showed a 0.82mb build that was in-line with the 1.21mb expectation. The more closely watched report from the Energy Information Administration (EIA) is due tomorrow, delayed to the holiday and inauguration this week. In other news, President Biden formally revoked a Keystone XL oil pipeline construction permit, which API called “a significant step backwards.”
Asian shares mostly strengthened overnight. While the Hang Seng slipped 0.1% lower, the Shanghai Composite climbed 1.1% higher and the Nikkei strengthened 0.8%. The Bank of Japan made its policy announcement, showing no change to policy settings, consistent with market expectations. The European Central Bank also made its policy announcement today, and also kept rates steady. In supportive news, the INSEE Business Climate Indicator for France rose to 98 this month, beating consensus at 93 and rising from an upwardly-revised 94 print last month. However, the CAC 40 was down 0.4% this morning. Meanwhile, the DAX was up 0.3% and the FTSE 100 had added 0.1% as of this writing. US stock market index futures were in the black, with Dow and S&P 500 futures up 0.2% and Nasdaq futures up 0.5%.
Petroleum futures strengthened for a second session on Wednesday amid gains in equities. Brent crude added 18 cents, closing at $56.08/bbl, and WTI crude rose 26 cents to settle at $53.24/bbl. RBOB futures settled 58 points higher at $1.5439/g, while ULSD (HO) futures edged up 17 points for a $1.6004/g settlement. New York Harbor barge prices strengthened relative to spot NYMEX, according to Platts, with the cash differential rising by 25 points to -0.10c/g. A regional trader told Platts that there is “strong demand through the East Coast, can’t keep up with our stores.” Meanwhile, ULSHO and HSHO differentials held steady at -10.25c/g and -15.75c/g, respectively. Spot January propane prices continued to fall back yesterday, according to Platts. Mt. Belvieu non-LST prices dropped 3.500 cents lower to 84.000c/g, LST prices dropped 3.750 cents lower to 85.250c/g, and Conway prices tumbled 8.750 cents lower to 86.250c/g. Platts sources pointed to falling Asian market prices.
Natural gas futures were little changed on Wednesday, shedding 70 points and settling at $2.539/mmBtu. The weekly EIA storage report, which would otherwise have been due today, is delayed until tomorrow. As of this morning, the latest 1-5 ECMWF outlook sees above-normal temperatures in the Midwest but some below-normal temperatures in the Northeast, and the 6-10 day outlook is similar.
