Looking to the Futures

Crude oil futures (/CL) traded near two-month lows after reports of a potential U.S.-Iran deal to reopen the Strait of Hormuz helped ease some supply concerns.

In its Weekly Petroleum Status Report, the Energy Information Administration (EIA) said crude oil stockpiles declined by 7.2-million barrels during the week ending June 5. This was above expectations for a 4-million barrel storage draw.

Oil inventories, excluding the Strategic Petroleum Reserve, stood at 426.5 million barrels, 5% below the five-year average.

U.S. oil production rose by 92,000 barrels per day last week, averaging 13.799 million barrels per day. This was 371,000 barrels per day higher than one year ago.

On the oil product side, distillate inventories decreased by 200,000 barrels, which was below expectations for a 500,000 barrel draw. Distillate inventories are now 13% below the five-year average for this time of year.

Gasoline inventories increased by 200,000 barrels, which was contrary to expectations for a 500,000 barrel draw. These stockpiles are now 6% below the five-year average.

EIA said gasoline production increased from the previous week and averaged 9.7-million barrels per day. Distillate production also increased last week, averaging 5.2-million barrels per day.

The agency also reported that U.S. ethanol production remained unchanged last week, averaging 1.108 million barrels per day. Expectations were for an increase to 1.115 million barrels per day.

U.S. ethanol inventories declined to 24.5 million barrels last week. Traders were expecting inventories of 24.3 million barrels.

Digging further into the EIA report, refinery utilization increased by 0.6 percentage points to 95.3% last week. Expectations were for an increase to 95.2%. U.S. gasoline demand increased by 137,000 barrels per day to 8.731 million barrels per day. Distillate demand also rose last week, increasing by 395,000 barrels per day to 3.864 million barrels per day.

Oil storage in Cushing, Oklahoma, the delivery point for the WTI Crude Oil futures (/CL) contract, fell by 800,000 barrels last week to 21.6-million barrels.

The U.S. crude oil rig count rose by two last week to 431 rigs during the reporting period ending June 5. That is down 2.5% 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® (+1.27%), the Nasdaq-100® (+2.08%), the Russell 2000® (+1.60%), and Dow Jones Industrial Average® (+0.89%) all positive. 

In Asia, major indexes closed higher, with the Hang Seng (+0.50%), the Nikkei (+4.99%), and Shanghai (+1.61%) posting gains 

European trading saw the DAX (+1.26%), the CAC (+1.16%), and the FTSE (+0.10%) markets move higher by midday.

Natural gas futures (/NGN26) ended Friday’s session higher (+1.07%), supported by forecasts for near to above-normal temperatures as summer begins, which could boost cooling demand.

The National Weather Service’s Climate Prediction Center expects temperatures from June 18 through June 24 to run from near normal to above normal across the lower 48 states.

The U.S. Energy Information Administration (EIA) reported that U.S. natural gas inventories increased by 108 billion cubic feet (Bcf) during the week ending June 5. That was above expectations for a 101 Bcf storage build. U.S. gas inventories are currently 6% above the five-year average and 0.2% below year-ago levels.

Coffee futures (/KCU26) ended the week higher (1.26%) as forecasts called for heavy rainfall across Brazil’s key coffee-growing regions, raising the potential for harvest delays.

Euro FX futures (/6EU26) closed higher on Friday (+0.14%) after the European Central Bank (ECB) raised interest rates by 25 basis points on Thursday and revised upward its inflation outlook, which could signal additional rate hikes in the coming months. 

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

New York Empire State Manufacturing index for June (interest rates)

Industrial Production for May (interest rates)

Capacity Utilization for May (interest rates)

Manufacturing Production for May (interest rates)

NAHB Housing Market index for June (interest rates)

Futures Last Trading Day: June currencies

3-and 6-month T-bills 

New futures products are available to trade with a futures-approved account on all thinkorswim platforms: 

• Ripple (/XRP)
• Micro Ripple (/MXP)
• 100 OZ Silver (/SIC)
• 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.