Petroleum futures were seeing gains of over two percent in the overnight session on Friday amid a bullish revision to Goldman Sachs' Brent crude price forecast, despite strength in the US dollar index and mixed trade in European shares and in US stock market index futures. Reuters reports that Goldman Sachs has raised its Brent price forecasts for the second and third quarters each by $5/bbl to $75/bbl and $80/bbl, respectively. Market participants awaited Canadian merchandise trade data, the Canadian Ivey PMI, the US employment situation report, US international trade in goods and services data, and the weekly US rig counts from Baker Hughes for further direction.
Asian stock markets closed flat to lower overnight with the Shanghai Composite closing flat, while the Nikkei lost 0.2% and the Hang Seng fell 0.5%. In European economic news, German manufacturers’ orders rose 1.4% in January, beating the Econoday consensus at 0.8%. On the other hand, Italian retail sales dropped 3.0% in January, after growth of 2.4% in December. The French merchandise trade deficit widened from E3.57bn in December to E3.95bn in January. The CAC 40 was down 0.4% this morning and the DAX had lost 0.7%. In UK news, the Halifax House Price Index showed prices dipping 0.1% last month rather than rising 0.3% as expected. Nonetheless, the FTSE 100 was up 0.3%. As of this writing, US stock market index futures were trading mixed near the unchanged mark. The US dollar index was extending its rally and was up 0.3%, which is unsupportive for crude oil prices.
Petroleum futures rallied yesterday with news that OPEC+ has agreed not to raise their production in April and a missile attack at a Saudi Aramco facility in Yemen, despite losses in equities and strength in the US dollar. Brent crude futures rose $2.67 to close at $66.74/bbl and WTI futures settled $2.55 stronger at $63.83/bbl. RBOB futures added 4.61 cents to settle at $1.9979/g and ULSD (HO) jumped 6.03 cents to close at $1.8960/g. The New York Harbor HSHO barge price differential to NYMEX weakened by two cents yesterday, according to Platts, to -20.25c/g, while ULSD and ULSHO barge differentials held steady at -0.10c/g and -14.25c/g, respectively. Spot propane prices rose along with crude yesterday, according to Platts, with Mt. Belvieu non-LST prices up 25 points to 96.750c/g, LST prices adding 62.5 points to 97.250c/g, and Conway spots strengthening 37.5 points to average 88.000c/g.
Natural gas futures fell 7.0 cents, settling at $2.746/mmBtu amid a weaker two-week heating degree day forecast, a tighter market balance expectation for next week, and a bearish weekly storage report from the EIA yesterday. The EIA reported a 98bcf withdrawal from underground storage for the week ended February 26, well below expectations at 136bcf. The latest 1-5 day outlook from the ECMWF calls for well-above-normal temperatures in the Midwest, while below-normal temperatures are expected on the East Coast. The 6-10 day forecast is less supportive with above-normal temperatures seen across the eastern two thirds of the country.
