Brent crude futures looked set to extend their rally to a sixth session, and WTI futures to a fifth, with across-the-board gains of about one percent as of this writing in the overnight session on Monday. The gains came amid further gains in global shares, despite an uptick in the US dollar index. Market participants had a quiet day before them on the economic calendar and would have to look elsewhere for direction.
Asian shares strengthened, with the Hang Seng up 0.1%, the Shanghai Composite gaining 1.0%, and the Nikkei rallying 2.1%. In European news, German industrial production figures for December disappointed, but there were base effects. Output was flat in December, against expectations for a 0.3% rise – but November output growth was revised up from 0.9% to 1.5%. Still, the DAX was trailing with a 0.3% gain, compared to a 0.7% rise in the CAC 40 and a 1.0% jump in the FTSE 100 this morning. Futures for the major US stock market indexes were also in the black, with S&P 500 and Nasdaq futures up 0.3% and Dow futures up 0.4%. Treasury Secretary Yellen said the US could reach full employment next year if the President’s $1.9tn package is passed. She also pushed against a reduced income cap for direct payments. The US dollar index was up 0.15% as of this writing, which was unsupportive for oil prices.
Brent crude futures rose for a fifth session and WTI extended its rally to a fourth on Friday, with the former up 50 cents to $59.34/bbl, and the latter gaining 62 cents and settling at $56.85/bbl. RBOB futures edged up 45 points, settling at $1.6493/g, while ULSD (HO) settled 1.32 cents stronger at $1.7137/g. New York Harbor barge price differentials to NYMEX made mixed moves on Friday, according to Platts. The ULSD differential rose 5 points to +0.05c/g, and the ULSHO differential strengthened by 50 points to -11.75c/g, but the HSHO differential fell 2.5 cents to -20.25c/g. February propane prices strengthened, per Platts, with Mt. Belvieu non-LST prices up 1.375 cents to 84.875c/g, LST prices up 2.375 cents to 86.500c/g, and Conway spots shooting 3.625 cents higher to 89.500c/g. Platts reports LPG is the preferred feedstock both in the US and Europe at the moment, providing support, but that overall demand could fall as temperatures rise seasonally.
Natural gas futures fell 7.2 cents amid a weaker heating degree day forecast and rise in the US rig count on Friday, settling at $2.863/mmBtu. The temperature outlook for the next 10 days is highly supportive. The Midwest is expected to see temperatures average as much as 15 degrees below normal in both the 1-5 and 6-10 day ECMWF outlooks. Below-normal temperatures are also expected in the Northeast, with especially large deviations below normal in the 6-10 day period.
