Written on: January 4, 2021

Energy Price Report

Monday, January 4, 2021

Crude futures are trading in the red in the on Monday, despite gains in European equities, US stock market index futures and weakness in the US dollar. Reuters reports that most OPEC countries would like to postpone a planned increase in oil output from February due to new lockdowns across the globe and weakening fuel demand, according to three sources. OPEC is expected to meet later today. Energy traders are looking ahead to US manufacturing and construction data for further direction.

The Caixin Manufacturing PMI for China fell from 54.9 in November to 53.0 last month. The final December Nikkei/Markit Manufacturing PMI for Japan came it at 50.0, up from 49.0 in November. Asian stock markets closed mixed overnight with the Nikkei down 0.7%, while the Hang Seng and the Shanghai Composite both added 0.9%. The Markit/Nikkei PMI in India rose slightly from 56.3 to 56.4.

In European news, the final Markit Manufacturing PMI for the Eurozone came in at 55.2, below consensus at 55.5. The index for Germany missed expectations by coming in at 58.3 (vs. 58.6), while the French PMI came in at 51.1, matching forecasts. In UK news, the final CIPS/Markit Manufacturing PMI for last month came in at 57.5, above consensus at 57.3. European shares are trading in the black this morning with the DAX up 1.2%, the CAC 40 having added 1.6%, and the FTSE 100 having rallied 2.7%. As of this writing, US stock market index futures were seeing gains of around 0.5%.

Energy futures settled mixed near the unchanged mark on Thursday, in thin trade ahead of the holiday weekend, with losses in European and US equities, as well as strength in the US dollar likely weighing. Brent crude closed 17 cents stronger at $51.80 barrel, WTI crude edged up 12 cents to settle at $48.52 a barrel, gasoline fell 36 points to settle at $1.4084 per gallon, heating oil dropped 35 cents lower to $1.4763 per gallon and natural gas futures rose 11.7 cents to $2.539 per MMBTU.

The latest 1-5 day EC outlook calls for above-normal temperatures across the majority of the country. The 6-10 and 11-15 day forecasts call for mixed but mostly above-normal temperatures in both the Midwest and the Northeast.