Crude futures were seeing gains of 0.5% and crack spreads were widening slightly with ULSD up 0.6% and RBOB up 1.3% as of this writing in the overnight session on Tuesday, with reports of an explosion in Riyadh and strength in European shares supporting along with flat-to-higher trade in US stock market index. Market participants looked ahead to US home price appreciation and consumer confidence data for further direction. Options on February NYMEX ULSD (HO) and RBOB futures expire today.
Reuters reports that an explosion was heard in Riyadh today, and while the cause was not immediately known, Saudi-owned Al Arabiya TV cited videos on social media of a missile being intercepted over the capital. Saudi coalition forces said they intercepted an “enemy air target” launched at Riyadh by Houthi forces in Yemen on Saturday.
Asian shares fell fairly sharply overnight. The Nikkei lost 1.0%, the Shanghai Composite fell 1.5%, and the Hang Seng tumbled 2.6% lower. Trade in Europe this morning was supportive, however, following stronger than expected UK labor market data. The claimant count for December came in at 7,000 – well below consensus at 35,000 – and the claimant count unemployment rate, expected to rise to 7.6%, instead held steady at 7.4%. The ILO unemployment rate (for September through November) came in at 5.0%, below consensus at 5.1%, and yearly average earnings growth of 3.6% beat the 2.9% forecast. The FTSE 100 was up 0.7% this morning. Gains in the CAC 40 were larger at 1.2%, and the DAX was up 1.6%. Futures for the major US stock market indexes were flat to higher, with Nasdaq futures just south of the unchanged mark, futures for the S&P 500 up 0.1%, and Dow futures up 0.2%. The US dollar index was flat.
The complex ended a see-saw session with across-the-board gains yesterday amid a halt to Libyan oil exports out of 3 ports and mostly higher trade in US shares, despite weakness in European equities and a slightly stronger dollar. Brent crude rose 47 cents to $55.88/bbl, and WTI settled 50 cents stronger at $52.77/bbl. RBOB futures settled at $1.5611/g, up 1.24 cents, and ULSD (HO) gained 1.79 cents to settle at $1.5939/g. According to Platts, the New York Harbor ULSD barge price differential to NYMEX strengthened by 35 points to -0.15c/g yesterday, on stronger pipeline values, while the ULSHO differential weakened by 25 points to -11.00c/g, based on Buckeye pipeline trade, and the HSHO barge differential held steady at -15.75c/g. January propane prices at Mt. Belvieu rose along with crude futures yesterday. Per Platts, non-LST prices at Mt. Belvieu climbed 87.5 points higher to 87.375c/g, LST prices at the hub strengthened by 1.75 cents to 88.500c/g, but Conway prices fell back 50 points to 82.750c/g.
Natural gas futures strengthened 15.6 cents, settling at $2.602/mmBtu yesterday with a stronger degree day forecast and tighter US market balance forecast. Below-normal temperatures are the expectation for both the Midwest and much of the Northeast over the next 5 days according to the latest ECMWF outlook. The 6-10 day outlook calls for above-normal temperatures in the Midwest, but continued below-normal temperatures for much of the East Coast.
