Crude futures looked set to extend their slide to a third session, with losses of over one percent as of this writing in the overnight session, amid fears over the coronavirus situation in Europe and some weakness in US shares, despite weakness in the US dollar index and strength in Asian and European equities. Market participants looked ahead to a large set of US economic data releases for further direction, as the two-day Federal Open Market Committee (FOMC) was set to get underway.
Germany, Italy, and France are suspending the distribution of AstraZeneca’s COVID-19 vaccine following reports from several countries of possible serious side-effects. The World Health Organization, however, says there is no proven link and that people should not panic. Separately, Reuters reports that an expert at the Robert Koch Institute for infectious diseases says that the risk of the AstraZeneca vaccine is relatively low, and that coronavirus infections in Germany are rising exponentially once again. In economic news, the ZEW Survey in Germany for March was a beat, showing stronger than expected current conditions (-61.0) and economic sentiment (76.6). Inflation data were also encouraging, as the final Italian CPI for February was left unrevised at a 0.1% monthly gain, as expected, and as the French CPI for the same month saw an upward revision from -0.1% to flat. European shares were strengthening as of this writing, with the CAC 40 up 0.2%, the FTSE 100 having gained 0.5%, and the DAX having climbed 0.6% higher.
Asian shares strengthened overnight, with the Nikkei up 0.5%, the Hang Seng gaining 0.7%, and the Shanghai Composite strengthening 0.8%. Futures for the major US stock market indexes were seeing mixed trade this morning, with Dow futures down 0.2%, S&P 500 futures flat, and futures for the Nasdaq up 0.5%. The US dollar index was down 0.07% after two sessions higher. Market participants looked to US industrial production and retail sales data for February as well as the NAHB Housing Market Index for March for further direction.
Crude futures fell for a second session on Monday, with further strength in the US dollar and weakness in European equities, despite strength in US shares. Brent crude slipped 34 cents lower to $68.88/bbl and WTI crude futures shed 22 cents, settling at $65.39/bbl. Crack spreads narrowed, particularly for gasoline, as RBOB futures dropped 4.54 cents to $2.1046/g, perhaps as Gulf Coast refining activity continues to rebound following the freeze in Texas. ULSD futures lost 1.86 cents and settled at $1.9489/g. According to Platts, New York Harbor HSHO barge prices weakened by 3.25 cents against spot NYMEX yesterday, leaving the differential at -23.25c/g, while ULSD and ULSHO differentials held steady at -0.40c/g and -16.25c/g, respectively. March propane prices, per Platts, weakened yesterday. Mt. Belvieu non-LST prices fell 75 points to 93.875c/g and LST prices also lost 75 points, hitting a 94.250c/g midpoint. Conway spots slipped 25 points lower to 86.000c/g.
Natural gas futures dropped 11.6 cents lower, settling at $2.484/mmBtu yesterday with a downward revision to the two-week GFS heating degree day forecast and as Refinitiv analysis indicated storage levels could be nearly unchanged next week, as we head towards the start of the injection season. The latest 1-5 day ECMWF outlook calls for above-normal temperatures in the Midwest, but below-normal temperatures in the Northeast. The 6-10 day forecast calls for much warmer than normal temperatures in both regions.
