Written on: November 1, 2021

Energy Report

Monday, November 1, 2021

Energy Futures in the black

Energy futures are trading in the black on Monday amid gains in US stock market index futures and in European shares, as well as some weakness in the US dollar, despite news that China has released some of its fuel reserves to fight diesel shortage.  Market participants are awaiting US data in form of the Markit Manufacturing PMI, the ISM Manufacturing Index and construction spending for further direction.

Refined Products Mixed

The complex settled mixed on Friday with mostly higher trade in shares supporting, while strength in the US dollar likely weighed on the price action.  Brent crude edged up 6 cents to $84.38 a barrel, WTI crude rose 76 cents to settle at $83.57, gasoline futures added 2.70 cents to settle at $2.4620 per gallon, natural gas futures dropped 35.6 cents to $5.426 per MMBTU, while heating oil futures fell 2.01 cents to $2.4964 per gallon.


According to Reuters, China released a statement saying that it was releasing state gasoline and diesel reserves to boost market supply and stabilize prices. The state reserves bureau said that this rotation was an annual one, but no volume was disclosed. This is the first time China announced the regular rotation for gasoline and diesel publicly. In more news, President Joe Biden urged major G20 energy producing countries to boost production to fight the market crunch and ensure a stronger global economic recovery.

The Jibun Bank Manufacturing PMI for Japan rose from 53.0 to 53.2 in October, indicating a stronger expansion in the sector. The Caixin Manufacturing PMI for China was a beat as the index came in at 50.6, above forecasts at 50.0. The Nikkei closed 2.61% higher overnight, while the Shanghai Composite edged down 0.08% and the Hang Seng lost 0.88%. The Markit Manufacturing PMI for India came in at 55.9 in October, up from 53.7 in September. In European news, retail sales in Germany fell 2.5%, while expectations called for a 0.5% increase in sales. The final CIPS/Markit Manufacturing PMI in the UK for last month came in at 57.8, just above consensus at 57.7. As of this writing, the FTSE 100 was up 0.38%, the DAX had added 0.75%, and the CAC 40 had gained 0.81%. US stock market index futures were seeing gains of around 0.4% this morning. The US dollar index was down 0.05%, which is also supportive for crude oil prices.

Weather Forecast

The latest 1-5 day outlook sees below-normal temperatures across the eastern two-thirds of the country, save for parts of Maine. The 6-10 day forecast is less supportive with mixed temperatures expected in the Midwest, while the Northeast is expected to see near to below-normal temperatures.