Looking to the Futures
Oil Prices Slip as Supplies Remain Ample
Crude oil futures (/CLF26) ended the week in the red as traders continue to see ample global oil supplies heading into 2026, as new production comes online despite concerns of slowing world demand in the new year.
In addition, in its Weekly Petroleum Status Report, the Energy Information Administration (EIA) said crude oil stockpiles decreased by 1.8-million barrels during the week ending December 5. This was above expectations for a 1.2-million barrel draw.
Oil inventories, excluding the Strategic Petroleum Reserve, stood at 425.7 million barrels, 4% below the five-year average.
U.S. oil production increased by 38,000 barrels per day last week and averaged 13.853 million barrels per day. This was 222,000 barrels per day higher than one year ago.
On the oil product side, distillate inventories increased by 2.5-million barrels, which was above expectations for a 1.9-million barrel build. Distillate inventories are now 7% below the five-year average for this time of year.
Gasoline inventories increased by 6.4 million barrels, which was above expectations for a 2.8-million barrel build. These stockpiles are now 1% below the five-year average.
EIA said gasoline production decreased from the previous week and averaged 9.6-million barrels per day. Distillate production rose last week, averaging 5.4-million barrels per day.
The agency also reported that U.S. ethanol production declined last week, averaging 1.105 million barrels per day. Expectations were for 1.109 million barrels per day.
U.S. ethanol inventories remained unchanged at 22.5 million barrels last week. Traders were expecting inventories of 22.3 million barrels.
Digging further into the EIA report, refinery utilization increased by 0.4 percentage point to 94.5% last week. Expectations were for an increase to 94.3%. U.S. gasoline demand increased by 130,000 barrels per day to 8,456 million barrels per day. Distillate demand also rose last week, increasing by 728,000 barrels per day to 4.158 million barrels per day.
Oil storage in Cushing, Oklahoma, the delivery point for the WTI Crude Oil futures (/CL) contract, rose by 300,000 barrels last week at 21.6 million barrels.
The U.S. crude oil rig count rose by six and now total 413 rigs during the week ending November 28. That is down 14.3% 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® (+0.49%), the Nasdaq-100® (+0.57%), the Russell 2000® (+0.80%), and Dow Jones Industrial Average® (+0.47%) all positive.
In Asia, major indexes closed lower, with the Shanghai (–0.55%), the Nikkei (–1.31%), and the Hang Seng (–1.34%) posting losses.
European trading saw the DAX (+0.37%), the CAC (+1.01%), and the FTSE (+0.96%) markets move higher by midday.
Futures on the move
Natural gas futures (/NGF26) ended Friday’s trading session in the red (–2.79%) with the January futures trading at six-week lows.
The National Weather Service Climate Prediction Center is forecasting above normal temperatures from December 18th to December 24th for all but the far northern sections of the lower 48 states, with well above normal temperatures seen in the South. Below normal temperatures are expected for far northern parts of North Dakota, Minnesota, and Maine during this period.
In addition, the U.S. Energy Information Administration (EIA) reported U.S. natural gas inventories declined by 177 billion cubic feet (Bcf) during the week ending December 5. This was above market expectations for a 165 Bcf draw. U.S. gas inventories are currently 2.8% above the 5-year average and –0.7% below last year.
Silver futures (/SIH26) closed lower on Friday (–4.00%) despite the lead month March contract posting new historic highs earlier in the trading session. Silver prices have been playing catch-up to the strong run in gold prices which hit its historic highs in October. In addition, strong demand for silver from the technology industry has tightened the supply of the precious and industrial metal.
Coffee futures (/KCH26) closed lower on Friday (–1.83%), with the lead month March contract trading at the lower end of the recent trading range. Brazil’s crop forecaster, Conab, expects Brazil’s 2025 coffee production will total 56.54 million bags, up 2.4% from its previous estimate.
What else to watch today
Major economic reports, trading events, and news items that could potentially impact specific futures markets:
New York Empire State Manufacturing Index for December (interest rates)
NAHB Housing Market Index for December (interest rates)
Today’s trading events
Last Trading Day-Futures: December currencies
Treasury auctions
3-and 6-month T-bills
Federal Reserve speakers
Federal Reserve President John Williams (New York) and Governor Stephen Miran are expected to speak today.
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