Written on: December 16, 2019

Petroleum Futures Continue Higher on Monday

Monday, December 16, 2019

Petroleum futures continue higher on Monday amid mixed but slightly supportive economic data from Asia and Europe, gains in US stock market index futures and losses in the US dollar index. US stock market index futures are seeing gains of between 0.21% (Dow) and 0.54% (Nasdaq) this morning. There was little on the newswires this morning.

Asian stock markets were mixed with Shanghai gaining 0.56%, while the Hang Seng and the Nikkei fell by 0.65% and 0.29% respectively. The Markit Flash Composite PMI for Japan fell slightly from 49.9 to 49.8 in December, whereas the flash Manufacturing PMI rose from 48.6 to 48.8. China’s November fixed asset investments held at 5.2% year-to-date (same as in October), as was expected, while the House Price Index rose by 7.1% year-on-year, lower than expected (7.8%). On the other hand, industrial production beat expectations of a 5.0% rise (year-on-year), by showing an increase of 6.2%. Retail sales rose more than expected as well, by 8.0% year-on-year (consensus at 7.6%). European stocks were trading higher this morning despite the release of mixed but mostly disappointing economic data. The flash Composite PMI index for the Eurozone this month increased from 50.3 to 50.6, higher than market expectations of 50.2. The flash Composite index for Germany came in at 49.4 (49.2 last month), below the expectations at 50.1, while the index for France matched the consensus at 52.0 (previous month was 52.0). The flash CIPS/PMI Composite index in the UK was a miss, coming in at 48.5, while forecasts called for 49.8. Italian Consumer Price Index for November fell by 0.2%, missing the consensus which called for no change. Market participants awaited the US Flash Composite PMI, Housing Market Index, and Empire State Manufacturing Survey for further direction.

Petroleum futures continued higher on Friday amid progress in US-China trade negotiations, weakness in the dollar and gains in equities. WTI crude added 89 cents to settle at $60.07 a barrel, Brent crude rose by $1.02 to close at $65.22, gasoline futures settled 3.49 cents higher at $1.6632 per gallon, heating oil rose by 3.56 cents to settle at $1.9864 and natural gas futures fell 3.2 cents to settle at $2.296 per MMBTU.

The latest 1-5 day EC outlook sees below-normal temperatures in both the Midwest and Northeast. The 6-10 day forecast is less supportive with above-normal temperatures across most of the country, with the exception of some parts of New England where the temperatures are expected to be below normal. The 11-15 day outlook shows below-normal temperatures in the Northeast and above-normal temperatures across most of the Midwest.