Crude futures were strengthening further in the overnight session on Wednesday amid gains in US stock market index futures and a bullish US crude oil inventory data from the American Petroleum Institute (API). Market participants awaited the US Consumer Price Index and the weekly inventory report from the Energy Information Administration (EIA) for further direction.
The API reported a 3.50mb draw from US crude oil stockpiles for the week ended February 5, well above expectations calling for a 0.86mb draw (average of polls by Reuters and S&P Global Platts). Data for distillates were unsupportive as API showed a smaller than expected draw of 0.49mb from distillate stockpiles (vs 1.25mb). The API figures were bearish for gasoline as the industry group reported a build of 4.80mb in gasoline inventories, while forecasts called for a smaller rise of 2.26mb. Cushing, OK crude oil inventories fell by 1.40mb last week, per API. The more closely watched EIA report is due at 10:30am.
Asian stock markets closed higher overnight with the Nikkei up 0.2%, the Shanghai Composite adding 1.4%, and the Hang Seng rallying 1.9%. The Producer Price Index in Japan rose 0.4% last month which matched expectations. The Chinese PPI rose 0.3% year-on-year last month, below expectations at 0.3%. The CPI in China rose 1.0% in January, below the Econoday consensus at 1.1%. In European economic news, the CPI in Germany rose 0.8% last month, matching forecasts. In the unsupportive column, industrial production in France fell 0.8% in December, while expectations called for a 0.2% rise. As of this writing, European shares were trading flat to higher with the CAC 40 and the DAX steady, while the FTSE 100 was up 0.1%. US stock market index futures were seeing gains of around 0.3%. The US dollar index was trading flat as of this writing.
Crude futures strengthened on Tuesday with flat-to-higher trade in US equities and losses in the US dollar. Brent added 53 cents to reach $61.09/bbl, and WTI settled at $58.36/bb, up 39 cents. RBOB futures edged down 12 points, settling at $1.6736/g, while ULSD (HO) settled 89 points higher at $1.7567/g. Per Platts, New York Harbor ULSD, HSHO, and ULSHO barge differentials held steady at +0.05c/g, -20.25c/g, and -11.35c/g, respectively. February propane prices made mixed moves yesterday, according to Platts, with Mt. Belvieu non-LST prices down 1.875 cents to 85.375c/g and LST prices dropping 1.50 cents to 86.875c/g, while Conway spot price rallied 2.25 cents to 98.750c/g.
Natural gas futures settled 4.7 cents lower at $2.835/mmBtu amid a weaker two-week heating degree day forecast and a looser US market balance expectation for next week. The latest 1-5 and 6-10 day ECMWF outlooks continue to call for well-below normal temperatures across the majority of the country, with large deviations below normal expected in the central part of the country.
