Petroleum futures were seeing gains in the overnight session on Monday amid progress towards a US stimulus package, optimism over COVID-19 vaccines, and strength in European equities and in US stock market index futures, despite strength in the US dollar. Market participants looked ahead to the German CPI and US manufacturing and construction data for further direction.
On Saturday, the US House of Representatives passed a $1.9 trillion coronavirus relief package, which has been sent to the Senate for a vote. The relief package would pay for vaccines and medical supplies, as well as send financial aid to small businesses and state and local governments. The bill also includes $1,400 direct payments to individuals and unemployment benefits of $400 per week through August 29. In more supportive news, the Johnson & Johnson COVID-19 vaccine has been approved by the CDC and distribution of 3.9 million doses already started on Sunday.
In economic news, the NBS Manufacturing PMI in China came in at 50.6 last month, below the Reuters poll forecast at 51.1. The Caixin Manufacturing PMI was also a miss as the index came in at 50.9, missing forecasts at 51.5. On the other hand, the Jibun Bank PMI showed that the Japanese manufacturing sector expended last month by coming in at 51.4, up from 50.6 in January. The Shanghai Composite closed 1.2% higher, the Hang Seng added 1.6%, and the Nikkei rallied 2.4%. The Markit/Nikkei PMI in India fell from 57.7 to 57.5 last month.
In European news, the final Markit Manufacturing PMI for the Eurozone came in at 57.9, above consensus at 57.7. The index for Germany also beat expectations by coming in at 60.7 (vs. 60.6), and the French PMI came in at 56.1, topping forecasts at 55.0. In UK news, the final CIPS/Markit Manufacturing PMI for last month came in at 55.1, above consensus at 54.9. The Consumer Price Index in Italy rose 0.1% last month, while forecasts called for no change. European shares were trading in the black this morning with the DAX having added 0.9%, while the CAC 40 and the FTSE 100 were both up 1.3%. As of this writing, US stock market index futures were seeing gains of between 0.8% (Dow f) and 1.1% (Nasdaq f). Unsupportive for crude oil prices, the US dollar index was up 0.2%.
Petroleum futures weakened on Friday amid a rally in the US dollar, losses in European equities, and a rise of 4 in the US oil rig count. WTI crude fell $2.03 to settle at $61.50/bbl and Brent crude lost 75 cents to close at $66.13/bbl. RBOB futures fell 1.53 cents to $1.8770/g and ULSD (HO) futures dropped 5.01 cents to $1.8565/g. According to Platts, New York Harbor ULSD, HSHO, and ULSHO barge differentials to NYMEX strengthened by 65 points, one cent, and 1.25 cents to +0.75c/g, -18.25c/g, and -11.75c/g, respectively. Also per Platts, propane prices fell along with crude prices on Friday as Mt. Belvieu LST prices dropped 1.375 cents to 94.625c/g and non-LST prices fell by one cent to 94.750c/g. Conway spot prices tumbled 13.000 cents, averaging 105.00c/g.
Natural gas futures edged down 60 points on Friday, settling at $2.771/mmBtu amid a rise in the rig count, a weaker two-week heating degree day forecast, and a looser US market balance expectation for this week. As of this morning, the latest 1-5 day outlook based on the European model calls for mixed but mostly above-normal temperatures in the Midwest, while the Northeast is expected to see below-normal temperatures. The 6-10 day forecast sees below-normal temperatures on the East Coast, while well-above normal temperatures are expected in the central part of the country.
