Looking to the Futures
Crude Prices Recover Despite Hefty Global Supplies
Crude oil futures (/CLV25) recovered from early session losses to end Friday’s trade higher, despite concerns of a global oil glut.
The International Energy Agency (IEA) increased its 2026 global crude surplus estimate to 3.33 million barrels per day, which was 360,000 barrels per day higher than the group’s August estimate.
In its Weekly Petroleum Status Report, the Energy Information Administration (EIA) said crude oil stockpiles rose by 3.9 million barrels during the week ending September 5. This was contrary to expectations for a 1.1 million barrel draw.
U.S. oil production increased by 72,000 barrels last week and averaged 13.495 million barrels per day. This was 195,000 barrels higher than one year ago.
On the oil product side, distillate inventories increased by 4.7 million barrels, which was well above expectations for a 100,000 barrel build. Distillate inventories are now 9% below the five-year average for this time of year.
Gasoline inventories increased by 1.5 million barrels, which was also contrary to expectations for a 100,000 million barrel draw. These stockpiles are now at the five-year average.
EIA said gasoline production decreased from the previous week and averaged 9.6 million barrels per day. Distillate production also decreased last week, averaging 5.2 million barrels per day.
The agency also reported that U.S. ethanol production increased last week, averaging 1.105 million barrels per day. Expectations were for 1.095 million barrels per day.
Ethanol inventories rose to 22.8 million barrels last week. Traders were expecting inventories of 23 million barrels.
Digging further into the EIA report, refinery utilization increased by 0.6 percentage point to 94.9% last week. Expectations were for an increase to 95%. U.S. gasoline demand fell by 609,000 barrels per day to 8.508 million barrels per day. Distillate demand also declined last week, falling by 391,000 barrels per day to 3.377 million barrels per day.
Oil inventories, excluding the Strategic Petroleum Reserve, stood at 424.6 million barrels, 3% below the five-year average.
Oil storage in Cushing, Oklahoma, the delivery point for the WTI Crude Oil futures (/CL) contract, fell by 300,000 barrels last week to 23.9 million barrels.
The U.S. crude oil rig count rose by two and now total 414 rigs during the week ending September 5. That’s down 14.3% from a year ago and the lowest oil rig count since September 2021, 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® (+0.17%), the Nasdaq-100® (+0.09%), the Russell 2000® (+0.35%), and Dow Jones Industrial Average® (+0.16%) all in the green.
In Asia, major indexes closed mixed, with the Hang Seng (+0.22%) higher, but the Shanghai (–0.26%) lower. The Nikkei was closed for a market holiday.
European trading saw the DAX (+0.43%), the FTSE (+0.02%), and the CAC (+1.16%) markets move higher by midday.
Futures on the move
Natural gas futures (/NGV25) ended Friday’s trading session slightly in the green (+0.24%) as weather forecasts are shifting warmer, which could increase demand for gas used for cooling.
The National Weather Service Climate Prediction Center is forecasting above normal temperatures from September 18th to September 24th for the entire lower 48 states during this time period.
In addition, the U.S. Energy Information Administration (EIA) reported U.S. natural gas inventories rose by 71 billion cubic feet (Bcf) during the week ending September 5. This was above with expectations for a build of 68 Bcf. U.S. gas inventories are currently 6% above the 5-year average, but –1.1% below last year.
10-year Treasury futures (/ZNZ25) closed lower on Friday (–0.33%), as bond bulls took some profits heading into the weekend after the 10-year Treasury note traded at five-month highs on Thursday. Also supporting the T-note selloff was the University of Michigan’s 5-year inflation expectations outlook rose to 3.9% vs. 3.5% the previous month.
Corn futures (/ZCZ25) closed higher on Friday (+2.44%), with the December contract ending the week near two-month highs. On Friday in its monthly supply and demand report, the USDA reported average U.S. corn yields fell by 2.1 bushels per acre from the August report to 186.7 bushels per acre. While this was deemed somewhat bullish by grain traders, it is still a record average corn yield for U.S. producers.
What else to watch today
New York Empire State Manufacturing Index for September (interest rates)
Today’s trading events
Last trading day-Futures: September currencies and Cocoa
Last trading day-Futures Options: September Lean Hogs
Treasury auctions
3-and 6-month T-bills
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