PETROLEUM COMPLEX (WTI | BRENT | ULSD | RBOB)
Petroleum futures settled in the black today amid news of another attack near the Red Sea port of Yanbu in Saudi Arabia, despite weakness in US and European equities and modest strength in the US dollar index. Reuters reported that OPEC+ will stick to its planned output increases from May to July amid supportive global demand recovery forecasts despite surging coronavirus cases in India, Brazil and Japan. The next OPEC+ ministerial meeting is scheduled for June 1 to review output levels for July and August. In US economic news, the S&P CoreLogic Case-Shiller Home Price Index rose 1.2% in February, above expectations at 1.1%. The Conference Board's Consumer Confidence Index jumped from a downwardly-revised 109.0 to 121.1 this month, beating expectations at 112.0. As of this writing, US stock market indexes were trading flat to lower with the S&P 500 off 0.04%, the Dow down 0.08%, and the Nasdaq having lost 0.27%. European shares closed flat to lower today with the CAC 40 steady, while the FTSE 100 and the DAX both fell 0.3%. Also unsupportive for crude oil prices, the US dollar index was up 0.14% as of this writing.
NATURAL GAS | WEATHER | INVENTORIES
Natural gas futures strengthened today despite a weaker two-week degree day forecast and a looser market balance expectation for next week. Refinitiv analysts now see total US supply of 98.1bcf/d outpacing US demand at 86.7bcf/d next week, implying larger injections of 11.4bcf/d (compared to yesterday’s forecast at 10.6bcf/d). The Global Forecast System cut its total degree day forecast from 142 to 139 for the next two weeks (64 HDDs and 75 CDDs), which is below the 30-year average of 150 TDD and well below last year’s 175 degree days over the same period. In the cash market today, prices at the Henry Hub benchmark fell by 6 cents to $2.73/mmBtu, while Transco Zone 6 prices in New York strengthened by 16 cents to $2.39/mmBtu and Algonquin citygate prices rose from $2.18 to $2.67/mmBtu. The National Hurricane Center does not expect any Atlantic tropical cyclone activity over the next 48 hours. According to a Reuters poll of analysts, estimates for the weekly EIA petroleum inventory report for the week ended April 23 call for a 0.7mb build in US crude stocks despite a 0.6 percentage point predicted increase in the nation’s refinery utilization rate. Distillate stocks are expected to fall by 0.6mb while gasoline stockpiles are expected to see an increase of 0.5mb. API petroleum inventories for the same week are due this afternoon at 4:30.
ENERGY TECHNICALS (WTI | ULSD | RBOB | NG)
ULSD futures continued higher today, strengthening 1.4% in an upside session and taking out $1.9000 resistance in the process. With bullish slow stochastics, RSI, MACD, and candlesticks, we'll adopt a flat-to-higher price view. Neither slow stochastics nor the RSI were oversold, and so we are less enthusiastic than otherwise about the bullish case. Nevertheless, we see next resistance at $1.9695, followed by the recent $1.9868 high. The aforementioned $1.9000 mark becomes nearby support, followed by the 50-day ma ($1.8535). RBOB futures strengthened 2.1% in an upside session, taking out 18-day ma resistance ($1.9950) and also the 9-day ma ($2.0118). Slow stochastics crossed for a buy signal a little bit north of oversold territory, while the RSI is neutral. We fall back to the sidelines, awaiting bullish confirmation. Along with the slow stochastics, the major averages are neutral/bullish, while other indicators are neutral. WTI futures rose 1.7% today, taking out 9-day ma resistance ($62.46), causing slow stochastics (again, not oversold) to re-cross and turn bullish. We fall back to neutral, seeing next resistance at $63.75 and then $66.85, whereas the 9-day ma and then $59.47 are expected to offer nearby support. The MACD, candlesticks, major averages, and slow stochastics point higher, and we'll be looking to see if bulls can follow through tomorrow. We were looking out for bullish confirmation today in NG, and received it. Bulls took us 3.0% higher in an upside session. Stochastics are close to overbought territory but have a little bit of room yet, as does the RSI (67.0). The MACD, candlesticks, and major averages all point higher. Higher chances for higher prices, with resistance expected at $2.898 and then $3.171, while $2.758 and then the 200-day ma ($2.569) are nearby support