Energy Price Report
Thursday, October 1, 2020
Energy futures are losing ground Thursday morning amid rising Russian crude oil production, despite another US producer bankruptcy, strength in European and US shares and a continued slide in the value of the US dollar against a basket of currencies. Economic data so far had been mixed and focused on the manufacturing sector. Market participants are looking ahead to US data in the form of weekly jobless claims, personal income, construction spending and manufacturing figures for further direction.
Reuters reports that sources put Russian oil and condensate production at 9.93mb/d last month, up from a 9.86mb/d average in August. Meanwhile, in US news from Reuters, Lonestar Resources US Inc – a Texas-based shale driller – has filed for Chapter 11 bankruptcy protection.
In economic news, the September Nikkei/Markit Manufacturing PMI for Japan came in at 47.7, an improvement from a 47.2 print in August, but not quite back to the breakeven mark of 50. More encouragingly, the index for India jumped from 52.0 to 56.8, indicating the expansion in the sector accelerated last month. The Nikkei was unchanged, while the Shanghai Composite shed 0.2% and the Hang Seng climbed 0.8% higher. Data from across the pond were mixed. Eurozone producer price inflation matched expectations in August, with the PPI up 0.1%, and a 0.2pp rise in the unemployment rate the same month to 8.1% also matched expectations. Similarly, the September Markit Eurozone Manufacturing PMI was left unrevised from the flash estimate at 53.7, matching consensus. The index for Germany saw a small surprise downward revision to 56.4, but the index for France saw a surprise upward revision to 51.2. The CIPS/Markit UK Manufacturing PMI saw a surprise, slight downward revision from the flash estimate, to 54.1. The FTSE 100 was up 0.6% as of this writing, while the CAC 40 had strengthened 0.9%, and the DAX had added 0.2%. Futures for the major US stock market indexes were seeing larger gains, of 0.9% for the Dow and S&P 500, and 1.3% for the Nasdaq.
Energy prices settled mixed on Wednesday. WTI crude gained 93 cents to settle at $40.22 per barrel, Brent crude slipped 8 cents lower to close at $40.95 a barrel, gasoline futures shed 9 points for a $1.2008 per gallon settlement, heating oil jumped 3.64 cents higher to $1.1454 per gallon and natural gas futures fell 3.4 cents to end the month at $2.527 per MMBTU.