PETROLEUM COMPLEX (WTI | BRENT | ULSD | RBOB)
Crude oil and refined products futures saw see-saw trade about the unchanged mark today, with weakness in the US dollar index likely supporting while rising coronavirus case counts and weakness in equities likely weighed. As noted in Pipeline, India is seeing record daily coronavirus infections and has taken the number two spot (behind the US) in terms of total infections. European shares mostly fell today, with the FTSE 100 in the UK down 0.28%, and Germany's DAX losing 0.59%. While the French CAC 40 added 0.15%, the pan-European Stoxx 600 fell 0.07%. North American economic data today were supportive, as Canadian housing starts picked up from an upwardly-revised 275,567 annualized pace in February to 335,200 in March - well above expectations at 250,000. As of this writing, the Dow was down 0.48%, the S&P 500 had lost 0.64%, and the Nasdaq was leading the way down with a 1.21% drop. On the other hand, the US dollar index was down by a relatively sharp 0.53%, seeing its weakest levels since March 4.
NATURAL GAS | WEATHER | INVENTORIES
Natural gas futures on NYMEX saw further strength today with a tighter US market balance forecast for this week. Refinitiv analysts raised their total US demand forecast for this week by 1.7 to 97.7bcf/d, outpacing forecast total supply of 97.5bcf/d and implying late withdrawals of 0.2bcf/d. Next week, however, analysts see supply holding at 97.5bcf/d while demand drops to 89.2bcf/d, implying injections into storage of 8.3bcf/d. The near-term forecast remains supportive, with the 1-5 day ECMWF model calling for below-normal temperatures expected across most of the Midwest and Northeast. Next-day cash natural gas prices at the New York citygate (Zone 6) rose 6 cents to $2.24/mmBtu, and benchmark Henry Hub prices added one cent to reach $2.63/mmBtu, but Algonquin citygate prices fell back 26 cents to $2.70/mmBtu. Looking further out, the 6-10 day ECMWF outlook sees below-normal temperatures persisting in the Midwest and Northeast. However, the Global Forecast System has trimmed its two-week heating degree day forecast for the next two weeks, by 9 to 137. This is above last year's 129 HDDs, and above the 30-year average (also 129).
ENERGY TECHNICALS (WTI | ULSD | RBOB | NG)
ULSD futures edged down 0.2% in a thinly-traded downside session, printing another Doji star candlestick. We'll stick to our neutral/bullish view, expecting resistance at $1.9000 and then $1.9695, whereas the 50-day ma ($1.8383) and then $1.8000 are seen offering nearby support. The MACD and ADX point higher, while the RSI, candlesticks, and major averages are neutral. Slow stochastics are overbought and threatening to cross for a sell signal, however. RBOB futures edged up 0.2% today but in a downside session. We will maintain our flat-to-higher view, looking to $2.1108 and then $2.1700 for resistance, whereas $2.0360 and then the 18-day ma ($1.9863) are nearby support. As with HO, slow stochastics are overcooked and looking set to cross for a sell signal - but there is no confirmation of overbought conditions from the RSI. WTI futures also saw listless trade today, adding 0.4% in a downside session. We continue to see resistance at $63.75 and then $67.98, with 9-day ma ($61.29) and then $57.21 support, maintaining a neutral/bullish view. Natural gas futures added 2.6% today, consistent with our directional bias. Futures gapped up and over the 50-day ma ($2.707) over the weekend, and went on to test nearby $2.758 resistance - but failed. We continue to favor upside chances, still seeing resistance at $2.758 and then $2.898, while the 200-day ma ($2.540) and then $2.403 remain nearby support.