PETROLEUM COMPLEX (WTI | BRENT | ULSD | RBOB)
Petroleum futures trade remains volatile, as price turned back north today and rallied appreciably - particularly WTI. Concerns that the container ship that beached and is blocking traffic across the Suez Canal could take weeks to refloat were a possible source of support. Trade in equities was supportive today, as across the pond the FTSE 100 climbed 1.0% higher, the DAX gained 0.9%, and the CAC 40 rose 0.6%. In US economic news today, the advance international trade in goods deficit was wider than expected in February, at $86.7bn ($86.1bn expected), but the final University of Michigan consumer sentiment index saw a surprise upward revision this month to 84.9 from 83.3. Today's headline was personal income and outlays data for February. Personal incomes fell 7.1% after an upwardly-revised and stimulus-driven 10.1% jump in January. Incomes had been expected to see a slightly sharper drop of 7.2%. Personal consumption expenditures fell 1.0% last month, sharper than the 0.7% predicted dip - but this could easily be explained by base effects as January spending growth was revised up sharply from 2.4% to 3.4%. The Core PCE, the Fed's preferred measure of inflation, rose 1.4% year-on-year, under consensus at 1.5%. The US dollar index extended its rally today, up about 0.2% as of this writing, which was unsupportive for crude. Also unsupportive was a rise of 6 in the weekly US oil rig count from Baker Hughes. At 324, the rig count is 300 lower than last year.
NATURAL GAS | WEATHER | INVENTORIES
NYMEX natural gas futures saw see-saw trade today, ending slightly lower . The Global Forecast System raised its two-week Heating Degree Day (HDD) forecast from 169 to 183, which is supportive, but this is still well below last year's 224 HDDs. The 30-year average for the period is 225. Refinitiv analysts see a tighter US market balance this week, as they revised up their total demand forecast by 0.7 to 97.5bcf/d, while trimming their supply forecast by 0.3 to 98.3bcf/d. The latest 1-5 day ECMWF outlook remains unsupportive, with above-normal temperatures expected in the Midwest and Northeast, although deviations above normal temperatures for the East Coast are expected to be smaller than previously forecast. The 6-10 day outlook is more supportive, with mostly below-normal temperatures expected in the Northeast. The Midwest is expected to see mixed temperatures. Next-day cash natural gas prices weakened. Benchmark Henry Hub prices fell 4 cents to $2.52/mmBtu, Transco Zone 6 prices in New York fell 5 cents to $1.78/mmBtu, and Algonquin citygate prices dropped 8 cents lower to $1.85/mmBtu. In neutral news, Baker Hughes once again reported no change in the US natural gas rig count this week, holding at 92.
ENERGY TECHNICALS (WTI | ULSD | RBOB | NG)
ULSD futures continued to see volatile, sideways trade, turning back higher and climbing 3.6% in an upside session today. Bulls took out 50-day ma resistance ($1.7765, now nearby support) in the process, but had some trouble with the 9-day ma ($1.8229) at the daily highs. Volume was thin today, and we'll stick to our downside bias for a session longer, looking to the aforementioned 50-day ma at $1.7765 and then to the recent $1.7295 low for support, whereas $1.8330 and then $1.9000 are our nearby resistance levels. RBOB futures rose 2.4% today in an inside session, with the 9-day ma ($1.9743) seeming to be a hurdle for the bulls at the highs. Slow stochastics are now bullish, while the RSI and MACD are neutral. Major averages are neutral/bullish as well. As with HO, trade has been sideways and volatile for the past six sessions. We continue to favor downside chances for now, seeing $1.8709 (recent low) and then 50-day ma ($1.8082) support, whereas the 18-day ma ($2.0197) and then $2.1108 are seen offering resistance. WTI futures climbed 4.1% higher in an upside session today, with bulls also unable to keep us above the 9-day ma ($61.19) on a settlement basis - but they did manage to take out nearby $59.67 resistance. This becomes nearby support, followed by $52.17, whereas the 9-day ma and then $63.75 are nearby resistance. Natural gas futures trade was more consistent with our directional view - we are neutral, and futures edged down 0.5% in an upside session. All indicators are quite neutral, and we continue to look to $2.758 and then $2.898 for resistance, whereas the 200-day ma ($2.470) and then $2.403 should offer nearby support.