Petroleum futures were trading flat to higher in the overnight session on Monday, after yesterday’s sell-off, amid flat-to-higher trade in US stock market index futures and a bullish revision to Goldman Sachs’ Brent crude price forecast, despite losses in European equities and continued gains in the US dollar. Reuters reports that Goldman Sachs has increased its Brent price forecast from $65/bbl in March to $80/bbl this summer saying that it expects a significant increase in global oil demand in the coming months amid COVID-19 vaccinations. Market participants awaited Canadian retail sales data and the weekly US rig counts from Baker Hughes for further direction.
The core CPI in Japan fell 0.4% year-on-year in February, below expectations calling for a 0.5% dip. The Bank of Japan kept monetary policy settings unchanged, as expected. The Nikkei and the Hang Seng both closed 1.4% lower, while the Shanghai Composite dropped 1.7%. In European news, the German Producer Price Index rose 0.7% last month, matching forecasts. European stock markets were trading in the red with the DAX and the CAC 40 both down 0.6%, whereas the FTSE 100 had lost 0.8%. As of this writing, US stock market index futures were trading flat to higher with Dow futures edging down 0.02%, while futures for the S&P 500 and the Nasdaq had added 0.12% and 0.44%, respectively. The US dollar index was up 0.05%, its third session higher.
Petroleum futures tumbled yesterday, led by WTI, with mostly lower trade in US equities and continued strength in the US dollar. Brent crude futures fell $4.72 (6.9%) to close at $63.28/bbl and WTI futures dropped $4.60 (7.1%) to settle at $60.00/bbl. RBOB futures lost 10.30 cents (5.0%) to settle at $1.9441/g and ULSD (HO) tumbled 12.19 cents (6.4%) for a $1.7842/g settlement. New York Harbor ULSD and ULSHO barge price differentials to NYMEX strengthened by 10 points and two cents to -0.25c/g and -15.25c/g, respectively, according to Platts. The HSHO barge differential held steady at -23.25c/g. Spot propane prices fell along with crude yesterday, according to Platts, with Mt. Belvieu non-LST and LST prices down 2.50 cents to 87.500c/g and 88.375c/g, respectively. Conway spot prices dropped 3.50 cents to 81.500c/g.
Natural gas futures fell 4.7 cents, settling at $2.481/mmBtu amid a bearish weekly storage report from the EIA yesterday and a weaker two-week heating degree day forecast. The EIA reported an 11bcf withdrawal from underground storage for the week ended March 12, well below expectations at 17bcf. The latest 1-5 day outlook from the ECMWF continues to see above-normal temperatures in both the Midwest and the Northeast. The 6-10 day forecast calls for above-normal temperatures across the eastern half of the country, with large deviations above normal temperatures expected in the Northeast.
