Thursday, September 5, 2019
Petroleum futures are trading mixed near the unchanged mark in early trading this morning, following yesterday’s 4% rally. The US dollar index is falling for a third session, equities are strengthening in Europe, and US stock market index futures are also rising, all supportive for crude oil prices. Weekly US crude oil inventory figures from the American Petroleum Institute were bearish. Data from API were neutral to unsupportive for gasoline, but supportive for heating oil.
The API reported a 0.40mb build in US commercial crude oil stockpiles for the week, whereas a Reuters poll of analysts had called for a 2.5mb draw. Cushing, OK stocks fell by 0.24mb. Gasoline stockpiles fell by 0.88mb, shy of the 1.50mb dip predicted by analysts, but a 1.2mb drop in heating oil stocks exceeded expectations at 0.48mb. In other news, Canada’s Federal Court of Appeal agreed yesterday to hear challenges by six indigenous groups, to the Canadian government’s approval of the Trans Mountain pipeline expansion project.
There was some supportive news last night regarding US and Chinese trade negotiations, as the Chinese Commerce Ministry said its trade team will consult with their US counterparts mid-month to prepare for negotiations to be held early next month. Today is a busy day on the US economic calendar. Market participants are looking ahead to the ADP Employment Report for July, weekly jobless claims, second quarter productivity and costs, July factory orders, and to the August Markit and ISM service sector indexes.
Energy prices rallied to post gains of over 4% yesterday amid strength in equities and weakness in the US dollar, as well as news that the US sanctioned an Iranian oil shipping network including 11 oil tankers and former Iranian oil minister Rostam Ghasemi. Brent crude jumped $2.44 higher to settle at $60.70 a barrel, WTI crude climbed $2.32 to close at $56.26 a barrel, gasoline futures closed 6.24 cents stronger at $1.5329 per gallon, heating oil settled at $1.8802 per gallon with a gain of 7.69 cents and natural gas futures gained 8.7 cents to settle at $2.445 per MMBTU.