WTI futures looked set to rise for a fourth session and Brent was looking to extend its rally to a fifth session today, as both were seeing gains of about one percent as of this writing in the overnight session on Friday. The gains came amid further strength in global equities and with a dip in the US dollar index. Market participants had a busy day on the economic calendar before them, as well as the Baker Hughes rig counts from which to draw further direction.
Japanese household spending rebounded from a 1.8% drop in November, growing 0.9% in December. The Nikkei jumped 1.5% higher last night, and the Hang Seng climbed 0.6% higher, although the Shanghai Composite slipped 0.2% lower. The Reserve Bank of India kept monetary policy settings unchanged at its latest meeting. Data from the Eurozone this morning were mostly encouraging. Although German manufacturers’ orders fell 1.9% in December, against expectations for a shallower 1.5% fall, there were base effects as November orders growth was revised up by 0.4 percentage points to 2.7%. The French merchandise trade deficit shrank from E3.78bn in November to E3.39bn in December. Finally, Italian retail sales rebounded in December, growing 2.5% (although November sales were revised from -6.9% to -7.3%). The DAX was up 0.3% and the CAC 40 had jumped 1.1% higher this morning. The FTSE 100 was lagging, up just 0.1%, following more disappointing housing market data for the UK, as the Halifax House Price Index showed pries fell 0.3% in January rather than rising 0.3% as expected.
US stock market index futures were rising this morning, with Nasdaq futures up 0.4% and futures for both the S&P 500 and the Dow up 0.5%. The US dollar index was down 0.12%. The Senate, after 15 hours of debate, narrowly – the Vice President provided the tie-breaking vote - approved a budget plan that would allow them to pass a $1.9tn coronavirus relief package with a simple majority. Market participants looked ahead to the US labor market report for January, expected to show a rise of just 50,000 in nonfarm payrolls, international trade in goods data for December, and to Canadian labor market and merchandise trade data for further direction.
Brent crude futures gained 38 cents to close at $58.84/bbl on Thursday, their fourth session higher. WTI futures settled 54 cents stronger at $56.23/bbl, their third session higher. RBOB futures dipped 38 points lower to settle at $1.6448/g, while ULSD (HO) settled one cent higher at $1.7005/g. New York Harbor ULSD and HSHO barge price differentials to NYMEX each weakened by 25 points yesterday, according to Platts, to +0.00c/g and -17.75c/g, respectively. ULSHO barge prices were steady at -12.25c/g to spot futures. Spot propane prices strengthened yesterday, according to Platts, with Mt. Belvieu non-LST prices up 1.500 cents to 83.50c/g, LST prices up 1.375 cents to 84.125c/g, and Conway spots edging up 12.5 points to 85.875c/g.
Natural gas futures jumped 14.6 cents higher, settling at $2.935/mmBtu with a supportive temperature outlook. The weekly EIA storage report matched expectations. The latest 1-5 day and 6-10 day outlooks from the ECMWF are very supportive. Temperatures in the Midwest are expected to see double-digit deviations below normal in degrees Fahrenheit. The Northeast is expected to see mostly below-normal temperatures, except for much of Maine and parts of northern Vermont and New York State. The 6-10 day forecast is highly supportive, with temperatures in much of the country – including the Pacific Northwest, Midwest, and Northeast seen falling to 15 degrees below normal or more.
