Written on: October 1, 2024
Tuesday, October 1, 2024
Crude oil and refined are trading flat to lower as of this writing on Tuesday morning, with flat to lower trade in US equities and strength in the US dollar, despite flat to higher trade in European equities and an Israeli ground incursion into southern Lebanon.
Market traders are looking ahead to the ISM Manufacturing Index for September, construction spending figures for August and the Job Openings and Labor Turnover Survey for the same month, for further direction.
Reuters reports that Israeli paratroop and commando units have launched raids in Lebanon in a “limited” ground incursion. In US news, the International Longshoremen’s Association (ILA) union has gone on strike for the first time since 1977, affecting ports from Texas up to Maine that account for about half of US imports. In other domestic news, the DOE has purchased 6mb of oil for the Strategic Petroleum Reserve (SPR) for delivery through May of next year. The DOE has funding for about 2 million more barrels at $75 a barrel, but will need to ask Congress for additional funding or cancel congressionally mandated sales in order to keep refilling the SPR.
In economic news this morning, the Japanese unemployment rate saw a surprise 0.2 percentage point drop to 2.5% in August. The Tankan Survey for the third quarter was a mixed bag, with stronger than expected large non-manufacturer sentiment but weaker than expected manufacturer sentiment. Large firm capital expenditure plans were weaker than expected, but small firm capex plans matched expectations. The Nikkei rallied 1.93% higher last night, while the Hong Kong and Shanghai stock exchanges were closed for a holiday. The Nikkei/S&P Global Manufacturing PMI for India saw a larger than predicted downward revision from the flat 57.5 print, to 56.5 last month. In European news, the flash HICP showed consumer prices increased by 1.8% last month, below the 2.0% forecast. Narrow Core prices rose by 2.7%, also below the 2.8% forecast. The final September S&P Global French (44.6), German (40.6), and Eurozone (45.0) Manufacturing PMI all saw surprise upward revisions from the flash estimate, as did the CIPS/S&P Global UK PMI, to 51.5. As of this writing, the CAC 40 was steady, the DAX had risen by 0.4%, and the FTSE 100 had gained 0.5%. Nasdaq futures were up by 0.1% but S&P 500 futures were flat and futures for the Dow were off by 0.2%.
Energy prices settled mixed and little changed yesterday, with a stronger dollar and losses in equities, as well as an agreement over Libyan central bank leadership likely weighing on trade, whereas Middle East tensions surrounding Israeli military activity were supportive. Brent crude slipped 21 cents lower to close at $71.77 a barrel, WTI crude closed one cent weaker at $68.17 a barrel, gasoline futures edged up 91 points to settle at $1.9621 per gallon, heating oil settled down 9 points at $2.1318 per gallon and natural gas futures added 2.1 cents to settle at $2.923 per MMBTU.
As of this morning, the NHC is tracking Tropical Storm Kirk (no perceived threat to land) and a disturbance to its east that is given a strong chance (80%) of developing into a tropical cyclone over the next two days.