PETROLEUM COMPLEX (WTI | BRENT | ULSD | RBOB)
Petroleum futures settled mixed near the unchanged mark today with losses in European equities and mostly lower trade in US shares, as well as strength in the US dollar likely weighing. In US economic news, weekly initial jobless claims came in at 787,000, well below expectations at 830,000. US stock market indexes were trading mixed near the unchanged mark as of this writing with the Dow and the S&P 500 steady, while the Nasdaq was down 0.2%. European shares closed in the red today with the CAC 40 down 0.9% and the FTSE 100 losing 1.5%. The DAX was closed today. Also unsupportive for crude oil prices, the US dollar index was up 0.3%.
ULSD RBOB & Nat Gas Forward Curves US Distillate Stocks
NATURAL GAS | WEATHER | INVENTORIES
Natural gas futures strengthened today amid a stronger two-week heating degree day forecast, despite a tighter market balance expectation for next week and a bearish weekly storage report from the Energy Information Administration (EIA). The Global Forecast System raised its heating degree day forecast for the next two weeks from 372 to 381, which is still well below the 30-year average of 461, but above last year's 348 HDDs over the same period. The latest 1-5 and 6-10 day outlooks (EC) see above-normal temperatures in both the Midwest and in the Northeast. The 11-15 day forecast calls for above-normal temperatures in the Northeast, but mixed temperatures in the Midwest. Refinitiv analysts now see total US demand of 117.8bcf/d outpacing US supply at 100.4bcf/d next week, implying smaller withdrawals of 17.4bcf/d (compared to yesterday’s forecast at 18.0bcf/d). In the cash market today, prices at the Henry Hub benchmark slipped from $2.40 to $2.36/mmBtu, Transco Zone 6 prices in New York fell from $2.37 to $2.32/mmBtu, and Algonquin citygate prices dropped from $3.14 to $2.48/mmBtu. The EIA reported a 114bcf withdrawal from underground natural gas storage for the week ended December 25, below forecasts at 125bcf. Total storage levels fell to 3.460tcf, which is 7.8% higher than last year and 6.3% above the five-year average for the reporting week.
ENERGY TECHNICALS (WTI | ULSD | RBOB | NG)
ULSD futures settled 0.9% lower in a low-volume downside session today – printing a Doji star shaped candlestick. Bears took out the 9-day ma ($1.4858), and now we look at the 18-day ma ($1.4635) and then down at $1.4000 for support, while the 9-day ma and $1.5198 are expected to offer resistance. We remain neutral for now, awaiting further developments. RBOB futures edged down 0.3% in an inside session – consistent with our neutral bias which we maintain. Slow stochastics are overbought, while the RSI is neutral, and the MACD points higher. We continue to see nearby resistance at $1.4913 and then up at $1.5427, while $1.3899 and the 19-day ma ($1.3465) are seen offering support. WTI edged up 0.2% in an inside session, which is also consistent with our neutral bias. We continue to see nearby support at $45.27 and at $42.02, with $49.28 and $50.54 seen as nearby resistance levels. Finally, natural gas futures added 4.8% in an upside session – inconsistent with our bearish bias. Slow stochastics and the RSI point higher and candlesticks look bullish as well, while the MACD remains neutral. We are going to fall back onto the sidelines, seeing nearby resistance at the 100-day ma ($2.607) and then up at $2.898, whereas $2.403 and $2.258 are expected to offer support.