PETROLEUM COMPLEX (WTI | BRENT | ULSD | RBOB)
Petroleum futures settled mixed near the unchanged mark with gains in US and European equities and continued weakness in the US dollar likely supporting. Reuters reported that Colorado State University forecasters said that the US should prepare for a sixth year with an above-average number of hurricanes in the Atlantic. Forecasters estimated that seventeen named storms and eight hurricanes will form this year, above the historical average of twelve storms and six hurricanes. In economic news, weekly US initial jobless claims came in at 744,000, well above the Econoday consensus at 680,000 and up from 728,000 the prior week. European shares closed higher today with the DAX up 0.2%, the CAC 40 adding 0.6%, and the FTSE closing 0.8% higher. As of this writing, US stock market indexes were trading flat to higher with the Dow steady, while the S&P 500 and the Nasdaq were up 0.3% and 0.8%, respectively. Also supportive for crude oil prices, the US dollar index was down 0.45%.
NATURAL GAS | WEATHER | INVENTORIES
Natural gas futures edged up today amid a supportive weekly storage report from the Energy Information Administration (EIA), despite a weaker two-week heating degree day forecast and a looser market balance expectation for next week. The EIA reported a 20bcf injection into underground natural gas storage for the week ended April 2, just below forecasts at 21bcf. Total storage levels rose to 1.784tcf, which is 11.6% lower than last year and 1.3% below the five-year average for the reporting week. Refinitiv analysts now see total US supply of 98.8bcf/d outpacing US demand at 87.6bcf/d next week, implying larger injections of 11.2bcf/d (compared to yesterday’s forecast at 8.8bcf/d). The Global Forecast System cut its heating degree day forecast for the next two weeks by 5 to 138, which is well below both last year’s 205HDDs over the same period and the 30-year average of 172. The latest 1-5 day outlook (EC) sees above-normal temperatures across the eastern half of the country, with large deviations above normal temperatures expected on the East Coast. The 6-10 day forecast calls for above-normal temperatures across the East Coast, while mostly below-normal temperatures are expected in the Midwest. In the cash market today, prices at the Henry Hub benchmark fell by one cent to $2.43/mmBtu and Transco Zone 6 prices in New York also lost one cent to $1.84/mmBtu, while Algonquin citygate prices fell from $2.02 to $1.95/mmBtu.
ENERGY TECHNICALS (WTI | ULSD | RBOB | NG)
ULSD futures edged up 0.1% in a slight upside session (printing a hammer shaped candlestick) – consistent with our neutral bias which we maintain. Slow stochastics point higher, while the RSI and candlesticks are neutral, and the MACD is bearish. We continue to see nearby support at the 50-day ma ($1.8086) and then down at $1.7295, while $1.8330 and $1.9000 are expected to offer resistance. RBOB futures added 0.4% in an inside session, which is also consistent with our neutral bias. Technical indicators are mostly neutral, so we will remain on the sidelines. Nearby support is still seen at the 50-day ma ($1.8761), followed by $1.7475, while the 18-day ma ($1.9818) and $2.1108 are seen offering resistance. Also consistent with our neutral bias, WTI futures lost 0.3% in an inside session – printing a Doji star shaped candlestick. Slow stochastics crossed bullishly in neutral territory and the RSI and candlesticks are neutral. The MACD is bearish now. We are going to stick to our neutral bias for now, looking to $57.21 and then $59.67 for support, while the 9-day ma ($60.12) and the 18-day ma ($60.91) are our nearby resistance levels. Finally, natural gas futures opened lower but rose intraday to settle 0.1% higher in an inside session – not so consistent with our bearish bias. Slow stochastics, the RSI, candlesticks, and the MACD are all neutral and we are going to fall back onto the sidelines now. We continue to see nearby resistance at $2.758 and then at $2.898, with the 200-day ma ($2.505 – tested today at lows) and $2.403 seen offering support.