Crude oil and refined products were seeing further, modest gains in the overnight session on Thursday amid weakness in the US dollar and strength in US stock market index futures. Trade in European shares was more mixed. Market participants were looking ahead to the European Central Bank (ECB) monetary policy announcement and to data on the US labor market for further direction.
Asian shares strengthened yesterday, following gains in European shares and flat-to-higher trade in US equities, despite weaker than expected Japanese producer price inflation. The PPI for Japan rose 0.4% last month, slowing from a 0.5% monthly rise in January. The Nikkei rose 0.6%, trailing a 1.7% jump in the Hang Seng and a 2.4% rally in the Shanghai Composite. European shares were seeing mixed trade ahead of the ECB policy announcement, expected to bring no changes to rates – but perhaps an increase in quantitative easing (QE) purchases within its Pandemic Emergency Purchase Program (PEPP). As of this writing, the FTSE 100 was down 0.3% and the DAX had shed 0.1%, but the CAC 40 was trading 0.2% stronger. US stock market index futures trade was supportive for crude. Dow futures were up 0.2%, S&P 500 futures had gained 0.6%, and Nasdaq futures were rallying 1.6%. Also supportive for crude, the US dollar index was falling for a third consecutive session, down by 0.27% and at its weakest levels since March 5.
Petroleum futures posted gains of between 0.5% (ULSD) and 1.4% (RBOB) on Wednesday, amid supportive weekly ULSD inventories, bullish gasoline stocks data, and bearish crude oil inventory figures from the EIA, as well as flat-to-higher trade in equities and weakness in the dollar. Brent crude added 38 cents, settling at $67.90/bbl, and WTI rose 43 cents to settle at $64.44/bbl. RBOB jumped 2.93 cents higher for a $2.0795/g settlement, while ULSD (HO) added one cent, settling at $1.9173/g. According to Platts, the New York Harbor cash market strengthened against NYMEX. The ULSD barge price differential strengthened by 65 points to -0.35c/g, the ULSHO differential jumped 1.25 cents higher to -14.75c/g, and the HSHO differential gained one cent, reaching -20.00c/g. EIA reported a 5.50mb draw from distillate stocks for the week ended March 5, with 3.19mb of that draw occurring on the East Coast. Meanwhile, EIA data were unsupportive for propane, as little change in stock levels was reported, against expectations for a draw of over 1.5mb. Mt. Belvieu non-LST prices fell 50 points to 91.500c/g, LST prices shed 37.5 points to hit a 92.000c/g midpoint, and Conway prices dropped 2 cents lower to 82.750c/g according to Platts.
NYMEX natural gas futures added 3 cents yesterday, settling at $2.692/mmBtu despite generally unsupportive developments including a cut to the two- week GFS heating degree day forecast. As of this morning, the latest 1-5 day ECMWF outlook calls for above-normal temperatures across the eastern two-thirds of the country. The 6-10 day outlook sees mixed temperatures in the Midwest and mixed, but mostly below-normal temperatures in the Northeast, especially in New England. The EIA is due to release natural gas storage figures for the week ended March 5 this morning, and a Reuters poll of analysts calls for a 73bcf withdrawal. This would be similar to last year’s 72bcf withdrawal but smaller than the 89bcf five-year average for the reporting week.
