Natural gas futures extended their earlier losses after a U.S. government report showed a larger-than-expected build in natural gas inventories last week. The U.S. Energy Information Administration said that natural gas inventories added 74 billion cubic feet, higher than consensus estimates for a build of 69 billion cubic feet. With temperate weather in the coming weeks likely leading to tepid gas demand, market participants have turned their attention to high inventories. “It’s a classic case of oversupply,” said Jay Levine, president of Enerjay LLC. “Natural gas is being weighed down by a combination of supply and depressed enthusiasm because of the economic malaise we’re in.” Natural gas in U.S. storage for the week ended Sept. 24 stood at 3.414 trillion cubic feet, 6.3% above the five-year average, but 4.6% below 2009 levels. Nymex November gas futures recently trade -14c, or 3.5%, at $3.822/MMBtu.
The API reported that for the week ending September 17 crude oil stocks rose by 2.231 million barrels to 364.069 million barrels, while distillate supplies gained by 2.509 million barrels to 170.014 million barrels. Primary gasoline stocks increased by 2.422 million barrels to 227.753 million barrels. Once again the data in general were not internally consistent, but we shall see what the DOE holds in store. Even if the DOE reports gross crude oil imports as robust as the API’s assuming refinery runs were little changed or up slightly would still imply some degree of decline in crude oil inventories. Our analysis would also have some difficulty coming up with the product builds the API reported. In any event, if the DOE data are more constructive than consensus expectations, traders and funds may use it as an excuse to stage a recovery from yesterday’s decline, throwing in the weaker dollar to boot.
LONDON (Dow Jones)–European stock markets moved sharply higher Friday, helped by positive leads from U.S. and Asian markets, with market participants looking ahead to U.S. economic data for further direction.
| By 0805 GMT, the Stoxx Europe 600 index was up 0.9% at 265.96, while London’s FTSE 100 index added 1.0% at 5596.66. In Paris, the CAC-40 index was 1.4% higher at 3786.24, and in Frankfurt the DAX index gained 0.9% at 6302.43. |
| Friday sees ‘triple-witching’ expiry, when stock-index futures, stock-index options and single-stock options all expire on the same day. |
| Despite the rise in uncertainty caused by this, it now appears that there is a clear short-term bias to the upside, said Altium Securities. Market participants now look to Friday’s economic data plate to build on momentum. The European calendar is light with only euro-zone current account data due at 0800 GMT, and thus the key highlights will be the release of U.S. CPI at 1230 GMT and the University of Michigan consumer confidence data at 1355 GMT. |
| U.S. consumer prices are expected to rise by 0.3% in August, while the University of Michigan consumer sentiment index is expected to edge up to 69 in September from 68.9 in late August, said Newedge Group. |
| ”Our call for a slight progress [in consumer sentiment] is based on the relative improvement in the August employment situation and recent gain in equities,” added Newedge. |
| In terms of stocks, the basic resource sector added strong gains, with industrial metals trading higher on the London Metal Exchange after several down sessions, with traders saying the complex was showing surprising resilience, given its current elevated levels. |
| At the same time, Australia’s Energy Minister Martin Ferguson said Friday he hopes to provide industry certainty on a proposed new levy on mining company profits “sooner rather than later”, noting that both investment and government revenue streams are riding on the controversial tax proposal. Overall, the Stoxx Europe 600 basic resource index rose +1.6%. |
| Meanwhile, shares in French retail giant Carrefour rose 6%, after it said it will begin refurbishing its largest stores in Europe next year, in a two-year, EUR1.5 billion project aimed at reviving the retailer’s core business. This also helped push the Stoxx Europe 600 retail index up 2.8%. |
| On Wall Street Thursday, technology companies boosted U.S. blue-chip stocks as confidence mounted that the economy would avoid a double-dip recession. |
| Overall, the Dow Jones Industrial Average closed up 0.2% at 10,594.83, while the Nasdaq Composite edged up 0.1% to 2303.25. The Standard & Poor’s 500-stock index slipped 0.1% to 1124.66. Among the technology stocks, Hewlett-Packard rose 1.8% while Cisco Systems gained 1.6% and Intel added 1.3%. |
| While all the benchmark indexes have surged this month, the Nasdaq has outpaced its peers. The measure has climbed almost 9% since the start of September as fears of a double-dip recession have relaxed. The DJIA has gained 5.8% this month, while the S&P 500 has added 7.2%. |
| The modest rise on Wall Street helped Asian stocks early Friday, although volumes in Korea and Japan have been limited ahead of holidays next week. |
| Japan’s Nikkei Stock Average was up 1.2%, while South Korea’s Kospi Composite rose 0.8%. China’s Shanghai Composite Index erased earlier gains and closed down 0.2%, while Hong Kong’s Hang Seng Index remained steady, up around 1.1%. |
| Japanese exporters continued to rise as the dollar remained well supported around Y85.80 after Tokyo’s market intervention earlier this week. Gains were broad-based, with 30 of the 33 Topix subindexes higher, although investors were not trading actively before Japanese public holidays on Monday and Thursday. |
| In the foreign exchange markets, the euro and sterling both gained ground early Friday, with the positive tone on the equity markets adding to the pro-risk tone. |
| At 0825 GMT, the euro was trading at $1.3143, up from $1.3078 late Thursday in New York, while sterling traded at $1.5709, up from $1.5622. Elsewhere, the dollar was at Y85.86, largely unchanged. |
| Among other assets, spot gold was at $1280.15 a troy ounce, not far off the new record high at $1282.75, while the October Nymex crude oil futures contract was up 42 cents at $74.99 per barrel. |
| However, the core safe haven sovereign debt markets pushed lower Friday, with the December bund futures contract down 0.13 at 129.25. |
| *DJ EIA: US Total Working Gas In Storage +103 Bcf At 3267 Bcf |
| Date: 09/16/2010 09:30 |
Tropical Storm Karl has formed in the northwestern Caribbean Sea, the National Hurricane Center reports in its 5 p.m. EDT advisory Tuesday.
| Mexico and Belize have several tropical storm warnings and watches in effect. The storm’s maximum sustained winds are measured at 40 miles per hour. |
| Karl is located about 270 miles east of Chetumal, Mexico, and is expected to bring about three to five inches of rain over Mexico’s Yucatan Peninsula, Belize and northern Guatemala. It is moving toward the west-northwest at 15 miles per hour, with some decrease in forward speed over the next few days. |
| Karl’s center is expected to hit the Yucatan on Wednesday and move into the Gulf of Mexico either Wednesday night or Thursday. |
| The NHC says the storm is small, with tropical storm winds extending outward about 10 miles from the center. |
Hornsby Trading News
- Platts Energy Inventory Survey Plus Hornsby & Company Inventory Assessment – February 7th.
- US NATURAL GAS INVENTORY SURVEY: Draw Of 126 Bcf Expected – Dow Jones
- Weekly DOE Inventory Report – February 1st.
- API Inventory Report – January 31st.
- Platts Energy Inventory Survey Plus Hornsby & Company Inventory Assessment – January 31st.