Written on: October 3, 2022

Energy Price Report

Monday, October 3, 2022

Energy Futures Gaining Today

Energy futures are seeing gains of over three percent on Monday amid gains in US stock market index futures and news that OPEC+ is now considering an output cut of more than 1mb/d ahead its Wednesday meeting, despite some strength in the US dollar and losses in European shares. Market participants awaited US economic data in the form of the S&P Global Manufacturing PMI, the ISM Manufacturing Index, and construction spending for further direction.

International News

The Japanese Jibun Bank Manufacturing PMI for September came in at 50.8, down slightly from 51.0 in August and indicating growth in the country’s manufacturing sector slowed. The Nikkei closed 1.07% higher overnight, while the Shanghai Composite fell 0.55% and the Hang Seng lost 0.83%. The S&P Global/Nikkei Manufacturing PMI for India came in at 55.1 last month, down from 56.2 in August. In European news, the final S&P Global Manufacturing PMI for the Eurozone for September came in at 48.4, slightly below consensus at 48.5. The indexes for both Germany and France also missed expectations with the German Manufacturing PMI coming in at 47.8 (vs 48.3) and the French index coming in at 47.7 (vs 47.8). The CAC 40 was down 0.4% and the DAX had edged down 0.2% this morning. In UK news, the final CIPS/S&P Global Manufacturing PMI for last month came in at 48.4, just below expectations at 48.5. The FTSE 100 was off 0.4% as of this writing. US stock market index futures were seeing gains of between 0.3% (Nasdaq futures) and 0.8% (Dow futures). The US dollar index was up 0.1%, which is unsupportive for crude oil prices.

Energy Prices Sank on Friday

The complex weakened on Friday despite strength in European equities and a Russian proclamation of the annexation of four regions of eastern Ukraine. Brent crude edged down 53 cents to $87.96 a barrel, WTI crude dropped $1.74 lower to settle at $79.49 a barrel, gasoline futures lost 3.50 cents to close at $2.4726 per gallon, heating oil fell 4.56 cents to $3.3690 per gallon and natural gas futures fell 10.8 cents to settle at $6.766 per MMBTU.

Weather Update

The NHC is tracking two disturbances in the Atlantic, one located east of the Windward Islands (30% chance of cyclone formation over the next two days), and the other located south of the Cabo Verde Islands (50% chance of cyclone formation).