Looking to the Futures
Crude Prices Climb on Rising Geopolitical Risks
Crude oil futures (/CLG26) ended the week in the green as prices find support from geopolitical concerns involving Russia and Venezuela, which are two major oil producing nations.
In addition, in its Weekly Petroleum Status Report, the Energy Information Administration (EIA) said crude oil stockpiles decreased by 1.3-million barrels during the week ending December 12. This was slightly above expectations for a 1.1-million barrel draw.
Oil inventories, excluding the Strategic Petroleum Reserve, stood at 424.4 million barrels, 4% below the five-year average.
U.S. oil production declined by 10,000 barrels per day last week and averaged 13.843 million barrels per day. This was 239,000 barrels per day higher than one year ago.
On the oil product side, distillate inventories increased by 1.7-million barrels, which was above expectations for a 1.2-million barrel build. Distillate inventories are now 6% below the five-year average for this time of year.
Gasoline inventories increased by 4.8 million barrels, which was well above expectations for a 2.1-million barrel build. These stockpiles are now slightly below the five-year average.
EIA said gasoline production increased slightly from the previous week and averaged 9.6-million barrels per day. Distillate production declined last week, averaging 5.2-million barrels per day.
The agency also reported that U.S. ethanol production increased last week, averaging 1.131 million barrels per day. Expectations were for an increase to 1.122 million barrels per day.
U.S. ethanol inventories declined to 22.4 million barrels last week. Traders were expecting inventories of 22.2 million barrels.
Digging further into the EIA report, refinery utilization increased by 0.3 percentage point to 94.8% last week. Expectations were for an increase to 94.6%. U.S. gasoline demand increased by 622,000 barrels per day to 9,078 million barrels per day. Distillate demand declined last week, falling by 372,000 barrels per day to 3.786 million barrels per day.
Oil storage in Cushing, Oklahoma, the delivery point for the WTI Crude Oil futures (/CL) contract, declined by 700,000 barrels last week at 20.9 million barrels.
The U.S. crude oil rig count rose by one and now total 414 rigs during the week ending December 12. That is down 14.1% from a year ago according to energy services firm Baker Hughes’ North American Rotary Rig Count report.
This morning, U.S. stock index futures moved higher in the early hours with the S&P 500® (+0.44%), the Nasdaq-100® (+0.66%), the Russell 2000® (+0.57%), and Dow Jones Industrial Average® (+0.03%) all positive.
In Asia, major indexes closed higher, with the Shanghai (+0.69%), the Nikkei (+1.81%), and the Hang Seng (+0.43%) posting gains.
European trading saw the DAX (–0.14%), the CAC (–0.49%), and the FTSE (–0.50%) markets move lower by midday.
Futures on the move
Natural gas futures (/NGH26) ended Friday’s trading session in the red (–0.37%) on weather forecasts calling for above normal temperatures for most of the U.S. into the new year.
The National Weather Service Climate Prediction Center is forecasting near normal to above normal temperatures from December 25th to December 31st for all but the far Northeast portions of the lower 48 states, where below normal temperatures are expected.
In addition, the U.S. Energy Information Administration (EIA) reported U.S. natural gas inventories declined by 167 billion cubic feet (Bcf) during the week ending December 12. This was below market expectations for a 169 Bcf draw. U.S. gas inventories are currently 0.9% above the 5-year average and –1.7% below last year.
Platinum futures (/PLF26) closed higher on Friday (+2.94%) as the industrial and precious metal closed above $2,000 per ounce for the first time since 2008. Platinum is forecasted to see its third consecutive year of deficits in 2025, as total supplies are expected to be down 2% this year.
U.S. Dollar index futures (/DXH26) closed higher on Friday (+0.17%), with the lead month March contract trading at one-week highs. Support for the currency basket index was seen from weakness in the Japanese yen, which fell sharply despite the Bank of Japan (BOJ) raising it policy rate to a 30-year high of 0.75% from 0.50% previously. A lack of clarity from BOJ officials on the prospect of further rate hikes prompted currency traders to sell the yen after the rate high announcement.
What else to watch today
Major economic reports, trading events, and news items that could potentially impact specific futures markets:
Treasury auctions
3-and 6-month T-bills and 2-year Notes
New Products
New futures products are available to trade with a futures-approved account on all thinkorswim platforms:
- Ripple (/XRP)
- Micro Ripple (/MXP)
- Micro Corn (/MZC)
- Micro Wheat (/MZW)
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- Micro Soybean Oil Futures (/MZL)
- Micro Soybean Meal Futures (/MZM)
- 1 OZ Gold (/1OZ)
- Solana (/SOL)
- Micro Solana (/MSL)
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