Looking to the Futures

Crude oil futures (/CL) fell back below $100 per barrel last week after briefly trading above $110 in the front month June contract on April 30. 

Oil prices moved lower on reports of continued negotiations between the U.S. and Iran. However, the Strait of Hormuz remains effectively closed, which is keeping nearly 14 million barrels per day of supply off the market and putting an elevated floor in crude prices. 

In addition, in its Weekly Petroleum Status Report, the Energy Information Administration (EIA) said crude oil stockpiles declined by 2.3-million barrels during the week ending May 1. This was below expectations for a 3.3-million barrel storage draw.

Oil inventories, excluding the Strategic Petroleum Reserve, stood at 457.2 million barrels, 1% above the five-year average.

U.S. oil production declined by 13,000 barrels per day last week, averaging 13.573 million barrels per day. This was 206,000 barrels per day higher than one year ago.

On the oil product side, distillate inventories decreased by 1.3-million barrels, which was below expectations for a 2.4-million barrel draw. Distillate inventories are now 11% below the five-year average for this time of year.

Gasoline inventories declined by 2.5-million barrels, which was above expectations for a 2.1-million barrel draw. These stockpiles are now 4% below the five-year average.

EIA said gasoline production decreased from the previous week and averaged 9.6-million barrels per day. Distillate production also declined last week, averaging 4.9 million barrels per day.

The agency also reported that U.S. ethanol production increase last week, averaging 1.017 million barrels per day. Expectations were for an increase to 1.021 million barrels per day.

U.S. ethanol inventories rose slightly to 26 million barrels last week. Traders were expecting inventories of 26.4 million barrels.

Digging further into the EIA report, refinery utilization increased by 0.5 percentage points to 90.1% last week. Expectations were for an increase to 89.9%. U.S. gasoline demand declined by 291,000 barrels per day to 8.813 million barrels per day. Distillate demand also declined last week, falling by 751,000 barrels per day to 3.362 million barrels per day.

Oil storage in Cushing, Oklahoma, the delivery point for the WTI Crude Oil futures (/CL) contract, fell by 700,000 barrels last week to 29.1-million barrels.

The U.S. crude oil rig count rose by one last week to 408 rigs during the reporting period ending May 1. That is down 14.8% 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 Nasdaq-100® (+0.02%) higher, but the Dow Jones Industrial Average® (–0.08%), the S&P 500® (–0.06%), and the Russell 2000® (–0.07%) trading lower. 

In Asia, major indexes closed mixed, with the Hang Seng (+0.05%) and the Shanghai (+1.08%) higher, but the Nikkei (–0.47%) lower. 

In Europe, markets were mixed by midday, with the FTSE (+0.06%) trading higher, but the DAX (–0.30%) and the CAC (–1.11%) posting losses. 

Natural gas futures (/NGM26) ended Friday’s session lower (–0.43%) as U.S. natural gas storage levels remain ample for this time of year.  

The U.S. Energy Information Administration (EIA) reported U.S. natural gas inventories saw a 63 billion cubic foot (Bcf) build during the week ending May 1. This was below expectations for a 74 Bcf storage build. U.S. gas inventories are currently 6.7% above the 5-year average and 3.5% above last year.

The National Weather Service’s Climate Prediction Center expects temperatures from May 14 to May 20 to be near normal to above normal for all of the lower 48 states. 

Canadian dollar futures (/6CM26) ended the week lower (–0.33%) following the release of weaker than expected employment data on Friday. Statistics Canada reported employment declined by 18,000 in April vs. expectations of a 15,000 jobs gain. The unemployment rate rose by 0.2% to 6.9% in April, which was a six-month high. 

Corn futures (/ZCN26) closed higher on Friday (+0.80%), with the lead-month July contract rebounding from two-week lows made earlier in the week. The USDA reported old-crop corn export sales totaled 1.362 million metric tons during the week ending April 30. This was down 18.1% from the same period last year. U.S. producers have planted 38% of this season’s corn crop as of May 3, which was on par with last year but 4% above the five-year average. 

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

Existing Home Sales for April (interest rates)

3-and 6-month T-bills and 3-year Notes

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.