Crude oil and refined products futures were seeing modest gains in the overnight session on Friday, despite weakness in global shares. Although economic data from Japan were a miss, data from Europe this morning were encouraging. Market participants had a busy day on the economic calendar before them, including US personal income and outlays, consumer sentiment, and pending home sales data, as well as monthly Canadian GDP, and there was also the Baker Hughes rig counts from which to draw direction.
Japanese industrial production fell 1.6% last month, worse than the 1.5% consensus decline. The unemployment rate held steady at 2.9% in December. The Nikkei dropped 1.9% last night, while the Hang Seng fell 0.9% and the Shanghai Composite lost 0.6%. European shares were losing ground this morning despite generally supportive economic data releases. The French economy, expected to contract 3.9% in the fourth quarter, instead saw a 1.3% dip, and third quarter GDP growth was revised up by 0.3 percentage points to 18.5%. German GDP, expected to hold steady last quarter, saw a 0.1% surprise uptick. Also encouraging, the German unemployment rate for December was revised down to 6.0% and held there this month, beating the 6.1% expectation. Back to France, consumption of manufactured goods shot up 26.8% last month, well above consensus at 16.0%. Nevertheless, the CAC 40 was down 0.9% this morning, the DAX had lost 0.8%, and the FTSE 100 was down 1.0%. Futures for the major US stock market indexes were also in the red, with losses of between 0.5% (Dow f) and 0.8% (Nasdaq f).
The complex settled flat to lower yesterday, with Brent crude shedding 28 cents to close at $55.53/bbl and WTI losing 51 cents, settling at $52.34/bbl. US-China tensions may have weighed, even as US and European shares strengthened and the US dollar weakened. RBOB futures added 58 points to settle at $1.5829/g, while ULSD (HO) settled at $1.6017/g, down 72 points. In the New York Harbor cash market, ULSD and ULSHO barge price differentials to NYMEX held steady, according to Platts, at -0.05c/g and -11.50c/g, respectively, while the HSHO differential strengthened by 50 points to -17.50c/g. Propane prices strengthened, according to Platts, with Mt. Belvieu non-LST prices up one cent to 93.000c/g and LST prices at the hub rising 12.5 points to 91.375c/g. Per Platts, the Mt. Belvieu front switch is heavily backwardated with February barrels at 81.250c/g. Conway prices shot up 3 cents yesterday to 84.250c/g, more consistent with the relatively large draw from Midwestern inventories reported by the EIA on Wednesday than was the price action on the day the data were released.
Natural gas futures shed 3.8 cents, settling at $2.664/mmBtu yesterday amid a bearish weekly EIA storage report, while a stronger two-week heating degree day forecast may have helped limit losses. As of this morning, the latest 1-5 day EC outlook calls for above-normal temperatures for most of the western two-thirds of the country, but below-normal temperatures on the East Coast, especially in upstate New York, Vermont, southwestern New Hampshire, and Massachusetts. The 6-10 day outlook sees mixed temperatures in the Midwest but above-normal temperatures on the East Coast.
