Energy Price Report

Tuesday, November 20, 2018

Energy prices were trading flat to lower in the overnight session, amid weakness in global equities, a modest rise in the US dollar index, and strikes at French refineries. Economic data releases were minor but neutral or supportive, and market participants looked ahead to US housing market data for further direction.

Reuters reports that the CGT trade union in France has called for a strike at Total’s refineries and petrochemical plants, over pay and bonuses, set to begin tomorrow and to last for two days or longer, if demands are not met. Total operates four refineries in France.

In other news, the head of the International Energy Agency, Fatih Birol, told a conference in Norway that we “are entering an unprecedented period of uncertainty in oil markets.” Birol said that the “U.S. decision on the Iranian sanction waivers took some of the players in the market by surprise…As a result, what we see today is that the markets are well supplied and the [oil] price went down by $20.”

Economic data this morning was generally favorable. German producer prices rose 0.3% month-to-month in October, matching expectations, the UK CBI Industrial Trends Survey index saw a surprise jump into positive territory, from -6 to 10, and the ILO unemployment rate in France saw a surprise 0.1 percentage point drop in the third quarter, to 8.8 percent. Market participants looked ahead to housing starts and permits data for October, expected to come in at annualized paces of 1.24m and 1.26m, respectively, according to the Econoday consensus forecast. Despite the upbeat data, US stock market index futures were pointing to further losses at the open today, and stocks in Europe and Asia were falling.

Crude oil and refined products futures settled flat to higher on Monday, despite heavy losses in the stock market, amid some weakness in the US dollar. Brent crude added 3 cents, settling at $66.79 a barrel and WTI crude settled 30 cents stronger at $56.76 a barrel.  Gasoline futures closed 59 points higher at $1.5829 per gallon and heating oil added 1.27 cents for a $2.0864 per gallon settlement.  Natural gas futures continued to see volatile trade on Monday, rallying 42.8 cents to close at $4.700 per MMBTU.

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