Written on: November 10, 2020

Energy Price Report

Tuesday, November 10, 2020

Energy futures are extending their gains on Tuesday morning amid strength in European equities and gains in the US dollar, as well as continued spikes in new COVID-19 infections. Energy traders are looking ahead to the Job Openings and Labor Turnover Survey (JOLTS) for October for further direction.

Economic data from China were unsupportive. The Chinese Producer Price Index fell 2.1% year-on-year in October, while expectations called for a slightly smaller drop of 2.0%. The Chinese Consumer Price Index rose 0.5% y/y in October, below the Econoday consensus at 0.8%. The Shanghai Composite fell 0.4%, while the Nikkei rose 0.3% and the Hang Seng added 1.1%. Economic data from Europe were mixed. French industrial production growth of 1.4% in September topped expectations at 0.8%. On the other hand, Italian industrial production fell by 5.6%, while forecasts called for a 2.0% decline. The ZEW survey in Germany was mixed, as the current conditions index came in at -64.3, slightly above consensus at -65.0, but the economic sentiment index dropped further than expected, from 56.1 and past consensus at 40.0, to 39.0. Data on the UK labor market were mostly supportive. Claims fell by 29,800, while the Econoday consensus called for a 43,000 figure. The unemployment rate of 7.3% beat the 7.7% forecast, while the ILO unemployment rate for the third quarter of 4.8% matched expectations. European shares were trading in the black this morning with the DAX up 0.2%, the CAC 40 having added 1.1%, and the FTSE 100 having gained 1.4%. US stock market index futures were trading mixed as of this writing with S&P futures down 0.1% and Nasdaq futures having lost 1.4%, while Dow futures were up 0.8%. The US dollar index was up 0.1%, which is unsupportive for crude oil prices.

Energy futures rallied yesterday amid strength in equities, news of a possible extension of OPEC output cuts, and a progress in COVID-19 vaccine trial. WTI crude settled $3.15 higher at $40.29 a barrel, Brent crude rose $2.95 to close at $42.40 a barrel, gasoline futures gained 7.63 cents and settled at $1.1607 per gallon, heating oil added 7.41 cents to $1.2167 per gallon and natural gas futures fell 2.9 cents to settle at $2.859 per MMBTU.

As of this morning the latest 1-5 day weather outlook calls for well above-normal temperatures on the East Coast and mixed temperatures in the Midwest. The 6-10 and 11-15 day forecasts see mostly above-normal temperatures across the eastern half of the country.