Written on: February 1, 2024
Thursday, February 1, 2024
Crude oil and refined products futures are seeing modest gains of under 1% as of this writing in on Thursday morning. Gains in futures for the major US stock market indexes are supportive, whereas a rise in the US dollar index is unsupportive and mixed trade in European equities is neutral. Energy traders are looking ahead to the January Challenger Job-Cut Report, weekly jobless claims, fourth-quarter productivity & costs, December construction spending and January ISM Manufacturing Index for further direction.
The OPEC+ Joint Ministerial Monitoring Committee made no recommendations on oil output policy when it met today, according to Reuters sources. The JMMC is set to meet next on April 3rd, but sources tell Reuters that OPEC+ is to review an extension of the 2.2 million barrels per day voluntary oil production cuts that are in place this quarter, in early March.
In economic news this morning, the S&P Global China Manufacturing PMI held steady at 50.8 in January, coming in just shy of expectations at 50.9. The Nikkei/S&P Global India Manufacturing PMI rose from 54.9 to 56.5, indicating expansion in the sector accelerated. Hong Kong shares gained 0.52% last night, but Shanghai shares fell by 0.64% and share prices in Tokyo dropped 0.76% lower. In European news, the final French (43.1, revised down from 43.2), German (45.5, revised up from 45.4), and Eurozone (46.6, unrevised) S&P Global Manufacturing PMI indicated contraction in manufacturing activity. The final CIPS/S&P Global UK PMI came in at 47.0, a surprise downward revision from 47.3. The Bank of England held monetary policy steady once again this month, as widely expected. The Eurozone unemployment rate held at 6.4% in December rather than rising to 6.5% as predicted. Finally, the flash Harmonized Index of Consumer Prices for January showed a 2.8% yearly rise in the price level and a 3.3% rise in Narrow Core prices, both consistent with expectations. As of this writing, the French CAC 40 had lost 0.6% and the German DAX had shed 0.1%, but the UK FTSE 100 had gained 0.2%. Futures for the Dow were up 0.1%, S&P 500 futures had gained 0.4%, and Nasdaq futures were trading up 0.5%. The US dollar index was up by 0.3%.
Crude oil futures lost ground yesterday with release of the weekly US crude stock data from the EIA and weakness in equities, despite a dip in the US dollar index. Brent crude fell by $1.16 to close at $81.71 a barrel, WTI crude settled $1.97 weaker at $75.85 a barrel, gasoline futures dropped 7.74 cents to settle at $2.1833 per gallon, heating oil edged up 14 cents to settled at $2.8082 per gallon.
The weekly EIA US natural gas storage report is due this morning, expected to show a 194bcf withdrawal that would exceed both last year’s 141bcf drop and the 185bcf five-year average.