Looking to the Futures

Crude oil futures prices rose sharply this past week with the lead month May futures up over 11% on Thursday. Gasoline and Heating Oil futures also rose sharply to end the holiday shortened week. 

In addition, in its Weekly Petroleum Status Report, the Energy Information Administration (EIA) said crude oil stockpiles rose by 5.5-million barrels during the week ending March 27. This was well above expectations for an 800,000 barrel storage build.

Oil inventories, excluding the Strategic Petroleum Reserve, stood at 461.6 million barrels, 0.1% above the five-year average.

U.S. oil production remained steady last week, averaging 13.657 million barrels per day. This was 77,000 barrels per day higher than one year ago.

On the oil product side, distillate inventories decreased by 2.1-million barrels, which was above expectations for a 600,000 barrel draw. Distillate inventories are now 3% below the five-year average for this time of year.

Gasoline inventories declined by 600,000 barrels, which was below expectations for a 1.9-million barrel draw. These stockpiles are now 4% above the five-year average.

EIA said gasoline production decreased from the previous week and averaged 9.6-million barrels per day. Distillate production remained steady last week, averaging 5 million barrels per day.

The agency also reported that U.S. ethanol production fell last week, averaging 1.075 million barrels per day. Expectations were for a decline to 1.085 million barrels per day.

U.S. ethanol inventories declined to 26 million barrels last week. Traders were expecting inventories of 26.5 million barrels.

Digging further into the EIA report, refinery utilization declined by 0.8 percentage points to 92.1% last week. Expectations were for decline to 92.3%. U.S. gasoline demand fell by 238,000 barrels per day to 8.686 million barrels per day. Distillate demand increased last week, rising by 471,000 barrels per day to 4.039 million barrels per day.

Oil storage in Cushing, Oklahoma, the delivery point for the WTI Crude Oil futures (/CL) contract, rose by 600,000 barrels last week to 31.5-million barrels.

The U.S. crude oil rig count fell by five and now total 409 rigs during the reporting period ending March 27. That is down 15.5% from a year ago according to energy services firm Baker Hughes’ North American Rotary Rig Count report.

U.S. stock index futures were mixed early this morning, with the S&P 500® (+0.09%) and Nasdaq-100® (+0.37%) higher, but the Russell 2000® (–0.07%) and Dow Jones Industrial Average® (–0.10%) trading lower. 

In Asia, Japan’s Nikkei finished the session higher (+0.55%). Markets in China and Hong Kong (Shanghai and Hang Seng) were closed for a holiday.

In Europe, the DAX, FTSE, and CAC remained closed today for a market holiday.

Natural gas futures (/NGK26) ended the week in the red (–0.67%) as U.S. gas storage levels rose more than expected in the prior reporting period.

The U.S. Energy Information Administration (EIA) reported U.S. natural gas inventories saw a 36 billion cubic foot (Bcf) build during the week ending March 27. This was above expectations for a 34 Bcf storage build. U.S. gas inventories are currently 3% above the 5-year average and 5.4% above last year.

In addition, the National Weather Service’s Climate Prediction Center said temperatures from April 9 to April 15 are expected to run near to above normal across most of the Lower 48 states, with below-normal readings confined to far northern Minnesota and North Dakota during this time period. 

10-year Treasury futures (/ZNM26) closed lower in Friday’s holiday-shortened session (–0.25%) as a stronger-than-expected March jobs report weighed on Treasuries. Employment rose by 178,000 last month versus expectations for 60,000, and the unemployment rate edged down 0.1% to 4.3%.

Gold futures (/GCM26) closed lower on Thursday (–2.77%), with the lead month June futures pulling back from two-week highs.  A rising U.S. Dollar index and higher global bond yields pressured gold prices as metal traders see major global central banks possibly needing to raise interest rates as sharply higher oil prices could boost inflation in the coming months. 

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

ISM Services PMI for March (interest rates)

Futures First Notice Day: April Live Cattle

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.