PETROLEUM COMPLEX (WTI | BRENT | ULSD | RBOB)
Crude futures opened stronger this morning, following indications that Russia would accept a rolling over of current OPEC+ output policy into May - although the Reuters source said Russia would be seeking another marginal increase to the Russian oil output ceiling under the agreement. Futures turned lower in the session and fell into negative territory following news that the Ever Given container ship beached in the Suez Canal had been refloated at 3pm local time. Futures later recovered, and ended flat to higher. Trade in European shares was supportive, as the FTSE 100 recovered from early losses to close down just 0.7% while the CAC rose 0.45% and the DAX gained 0.47%. US shares were seeing mixed trade this afternoon, with the Dow up 0.1%, but the S&P 500 flat, and the Nasdaq down by 0.3%. The US dollar index was appreciating slightly (0.1%) against a basket of currencies, which is unsupportive for crude.
NATURAL GAS | WEATHER | INVENTORIES
NYMEX natural gas futures also saw early weakness, but recovered later on in the session, ending slightly stronger. The Global Forecast System trimmed its two-week Heating Degree Day (HDD) forecast slightly, from 183 down to 181, which is below last year's 187 HDDS during the same period and well below the 213-HDD 30-year norm. The 1-5 day ECMWF outlook calls for above-normal temperatures west of the Great Lakes, but below-normal temperatures to their south and for much of the East Coast. However, above-normal temperatures are expected across much of northern New England. Next-day cash natural gas prices saw flat-to-lower movement, with Henry Hub holding at $2.52/mmBtu, while Zone 6 prices in New York fell 16 cents to $1.62/mmBtu and Algonquin citygate prices shed 5 cents, slipping down to $1.80/mmBtu. The latest 6-10 day ECMWF forecast is unsupportive, with above-normal temperatures expected across much of the country, with especially large deviations above normal expected in the Midwest. Refinitiv analysts see small draws this week, with US supply of 98.6bcf/d being slightly outpaced by demand at 99.2bcf/d, but injections of 6.2bcf/d are expected next week as supply ticks up to 98.9bcf/d while demand drops to 92.7bcf/d.
ENERGY TECHNICALS (WTI | ULSD | RBOB | NG)
ULSD futures settled virtually unchanged today, printing a Doji star in very thin trade. We continue to favor downside chances for now, seeing support at the 50-day ma ($1.7803), followed by the recent $1.7295 low, whereas $1.8330 and then $1.9000 are expected to offer resistance. RBOB futures climbed 1.4% higher today, and with slow stochastics, candlesticks, and major averages pointing higher, we abandon the bears. We look to the 18-day ma ($2.0219) and then to $2.1108 for resistance, while the recent $2.8709 low and then the 50-day ma ($1.8170) are expected to offer support. WTI futures rose 1.0%, and here too we abandon the bears and fall to the sidelines. The 9-day ma ($60.84) and then $59.67 are our nearby support levels, while $63.75 and then the recent $67.98 high are seen offering resistance. Candlesticks, slow stochastics, and major averages are neutral/bullish, while the RSI and MACD are neutral. We've been on the natural gas sidelines for some time, and trade continues to be mostly sideways, although there is a little bit of an uptrend. Futures rose 1.1% today, but in an outside session, and so we'll stick to our neutral stance. We continue to look to $2.758 and then to $2.898 for nearby resistance, whereas the 200-day ma ($2.474) and then $2.403 are nearby support.