Crude futures were seeing gains of around 1% and crack spreads were narrowing as ULSD and RBOB futures were seeing small losses in the overnight session on Monday, with weakness in the US dollar supporting, while losses in European shares and in US stock market index futures were unsupportive. Market participants had a quiet day before them on the economic calendar and would have to look elsewhere for direction.
Reuters reports that S&P Global Platts has decided to include US crude grade WTI Midland in its dated Brent oil price assessment, which would be the first crude from outside the North Sea to be added to the global benchmark. The reason behind this move is that oil output in the North Sea has been declining and it has become necessary to include an increasing number of streams over the years along with the original Brent field. WTI will be reflected in dated Brent from July 2022 cargo deliveries and the basis of the benchmark will be changed to a delivered basis.
Asian stock markets closed mixed overnight with the Nikkei up 0.5%, whereas the Hang Seng fell 1.1% and the Shanghai Composite dropped 1.5%. In European news, The Ifo Survey’s Business Climate index for Germany came in at 92.4 this month, beating the 90.4 expectation. European shares were trading in the red this morning with the CAC 40 down 0.6%, while the DAX and the FTSE 100 had both lost 0.7%. US stock market index futures were seeing losses of between 0.7% (Dow f) and 1.4% (Nasdaq f) as of this writing. The US dollar index was down 0.1%, which is supportive for crude prices.
Crude futures weakened on Friday despite strength in equities and weakness in the US dollar index, as well as a drop of 1 in the US oil rig count. WTI crude fell $1.28 to settle at $59.24/bbl and Brent crude lost $1.02 to close at $62.91/bbl. RBOB futures rose 1.26 cents to $1.8069/g, while ULSD (HO) futures edged down 1.35 cents to $1.8229/g. According to Platts, the New York Harbor ULSHO barge differential to NYMEX weakened by 25 points to -11.25c/g, while ULSD and HSHO barge differentials held steady at +0.25c/g and -18.00c/g. Also per Platts, February propane prices fell along with crude prices on Friday as Mt. Belvieu LST prices dropped 7.5 cents to 96.000c/g and non-LST prices tumbled 3.5 cents to 96.750c/g. Conway spot prices fell by 2.25 cents, averaging 1.140/g.
Natural gas futures edged down 1.3 cents on Friday, settling at $3.069/mmBtu amid a rise in the rig count and a weaker two-week heating degree day forecast, despite a tighter US market balance expectation for this week. As of this morning, the latest 1-5, 6-10 and 11-15 day outlooks based on the European model call for above-normal temperatures across the eastern half of the country.
