Looking to the Futures

Crude oil futures (/CLF26) ended Friday’s session in the red, with the lead month January futures trading at one-month lows. On Thursday, Ukraine President Zelenskiy said he would agree to work on a peace plan put forth by the U.S. and Russia. An end to the Ukraine/Russia war could see U.S. sanctions against Russian energy exports reduced or lifted, which would add to global crude supplies. 

In addition, in its Weekly Petroleum Status Report, the Energy Information Administration (EIA) said crude oil stockpiles declined by 3.4-million barrels during the week ending November 14. This was well above expectations for a 600,000 barrel draw.

U.S. oil production decreased by 28,000 barrels per day last week and averaged 13.834 million barrels per day. This was 633,000 barrels per day higher than one year ago.

On the oil product side, distillate inventories increased by 200,000 barrels, which was contrary to expectations for a 1.2-million barrel draw. Distillate inventories are now 7% below the five-year average for this time of year.

Gasoline inventories increased by 2.3 million barrels, which was also contrary to expectations for a 200,000 barrel draw. These stockpiles are now 3% below the five-year average.

EIA said gasoline production decreased from the previous week and averaged 9.3-million barrels per day. Distillate production also declined last week, averaging 4.9-million barrels per day.

The agency also reported that U.S. ethanol production rose last week, averaging 1.091 million barrels per day. Expectations were for 1.11 million barrels per day.

U.S. ethanol inventories rose slightly to 22.3 million barrels last week. Traders were expecting inventories of 22.5 million barrels.

Digging further into the EIA report, refinery utilization increased by 0.6 percentage point to 90% last week. Expectations were for an increase to 89.7%. U.S. gasoline demand fell by 500,000 barrels per day to 8,528 million barrels per day. Distillate demand also declined last week, falling by 136,000 barrels per day to 3.882 million barrels per day.

Oil inventories, excluding the Strategic Petroleum Reserve, stood at 424.2 million barrels, 5% below the five-year average.

Oil storage in Cushing, Oklahoma, the delivery point for the WTI Crude Oil futures (/CL) contract, declined by 700,000 barrels last week to 21.8 million barrels.

The U.S. crude oil rig count rose by three and now total 417 rigs during the week ending November 14. That is down 12.8% 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® (+0.37%), the Nasdaq-100® (+0.61%), the Russell 2000® (+0.16%), and Dow Jones Industrial Average® (+0.08%) all positive. 

In Asia, major indexes closed higher, with the Shanghai (+0.05%) and the Hang Seng (+1.97%) posting gains. The Nikkei was closed for a market holiday. 

European trading saw the DAX (+0.52%), the CAC (+0.01%), and the FTSE (+0.22%) markets move higher by midday.

Natural gas futures (NGF26) ended Friday’s trading session in the green (+1.63%) as below normal temperatures expected to return most of the U.S. into the beginning of December.

The National Weather Service Climate Prediction Center is forecasting below normal temperatures from November 27^th to December 3^rd for most of the lower 48 states, with the exception of California, Florida, and parts of Nevada, Texas, and Georgia, which are expected to see above normal temperatures during this period.

In addition, the U.S. Energy Information Administration (EIA) reported U.S. natural gas inventories declined by 14 billion cubic feet (Bcf) during the week ending November 14. This was above market expectations of a 12 Bcf draw. U.S. gas inventories are currently 3.8% above the 5-year average and –0.6% below last year. 

Coffee futures (/KCH26) closed lower on Friday (–1.91%) with the lead month March futures trading at 8-week lows. Coffee prices have come under pressure as weather forecasts are calling for heavy showers in the major coffee growing regions of Brazil, which is the world’s largest coffee producing nation. Much needed rainfall is seen as supportive for coffee crop production. 

U.S. Dollar index futures (/DXZ25) closed higher on Friday (+0.02%), with the December futures trading near six-month highs. The greenback has found support from an upward revision in the University of Michigan Consumer Sentiment index which came in at 51.0 in November. In addition, recent hawkish comments from Federal Reserve officials have traders reducing the prospects of an interest rate cut at the December Federal Open Market Committee meeting. 
 

Major economic reports, trading events, and news items that could potentially impact specific futures markets:

Chicago Fed National Activity Index for October (interest rate futures)

Dallas Fed Manufacturing Index for November (interest rate futures)

Last Trading Day-Options: December Gold, Silver, and Copper

3-and 6-month T-bills and 2-year Notes

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)
• Micro Soybean (/MZS)
• Micro Soybean Oil Futures (/MZL)
• Micro Soybean Meal Futures (/MZM)
• 1 OZ Gold (/1OZ)
• Solana (/SOL)
• Micro Solana (/MSL)

Visit the Schwab.com Futures Markets page to explore the wide variety of futures contracts available for trading through Charles Schwab Futures and Forex LLC.