PETROLEUM COMPLEX (WTI | BRENT | ULSD | RBOB)
Petroleum futures strengthened amid weakness in the US dollar and strength in most US and European stock market indexes, despite data showing stronger Russian production last month. According to Reuters calculations on data from Interfax, Russian oil and gas condensate production rose by 2% to 10.46mb/d last month. Russia's OPEC+ quote for oil production was raised by 130kb/d to 9.379mb/d for April. The Russian energy ministry did not break out the oil and condensate production split. European shares strengthened today amid data showing continued growth in the Eurozone manufacturing sector - even if the Markit indexes missed consensus forecasts. German retail sales figures were a beat. The DAX climbed 0.66% higher today, and the CAC 40 rose 0.61%, while the FTSE 100 added 0.12%. US data were similar. The ISM manufacturing index fell from 64.7 to 60.7, rather than rising to 65.0 as expected. The Nasdaq was down 0.47% as of this writing, but the S&P 500 was still 0.35% stronger and the Dow had gained 0.83%. Also supportive for crude futures, the US dollar index was down 0.32%, reversing about half of Friday's rally.
NATURAL GAS | WEATHER | INVENTORIES
NYMEX natural gas futures were little changed today, ending slightly higher with an uptick in the two-week degree day forecast, but looser US market balance expectations. The Global Forecast System sees 148 degree days (73 heating and 75 cooling) over the next two weeks, up from 132 previously. This matches the 30-year average (84 hearting and 58 cooling) but is below last year's 172 degree days for the same period. Refinitiv analysts see total US demand of 86.2bcf/d being outpaced by total supply of 97.2bcf/d this week, implying 11.0bcf/d injections - up from 9.9bcf/d previously. Next week, demand is seen ticking down 0.1 to 86.1bcf/d while supply hold steady. Cash natural gas prices fell, with benchmark Henry Hub prices down 5 cents to $2.86/mmBtu, Transco Zone 6 prices (New York) dropping 49 cents to $1.85/mmBtu, and Algonquin citygate prices tumbling 76 cents lower to $1.65/mmBtu. The National Weather Service expects no tropical cyclone formation in the Atlantic over the next 48 hours.
ENERGY TECHNICALS (WTI | ULSD | RBOB | NG)
NYMEX HO futures gapped lower over the weekend, hitting the 9-day ma ($1.9052) at the lows but not quite reaching nearby $1.9000 support. Futures recovered, and we gained 1.5% in an outside session (there was a higher high to go along with the lower low). This was consistent with our directional bias, and we continue to favor upside chances for the moment, with nearby resistance expected at $1.9695 and then $1.9868 (recent high), whereas $1.9000 and then the 50-day ma ($1.8627) are seen offering support. We stuck with RBOB bulls on Friday, and futures climbed 1.2% higher in an upside session. However, slow stochastics look set to cross for a sell signal in overbought territory, and bulls have been unable to take out $2.1108 resistance. We'll be keeping a close eye there, followed by $2.1700, while the 18-day ma ($2.0196) and then $1.9000 are nearby support. WTI futures added 1.4% today, taking out $63.75 resistance, but in a downside session, with a lower low that saw a test of 9-day ma ($62.97) support. As with products, slow stochastics have recrossed bearishly, but in this case we were not overbought and the RSI (58.9) has plenty of headroom. We'll continue to favor the upside for now, seeing resistance at $66.85 and then $67.98 (recent high), with $63.75 and then 9-day ma support. We also favored upside chances for natural gas futures, and prices rose 1.2% today in an upside session. Slow stochastics are overbought and have crossed for a sell signal, and the RSI (71.3) confirms overbought conditions. Meanwhile, the MACD, major averages, and candlesticks all point north. Continuing to side with the bulls for now, we see nearby resistance at $3.171 and then $3.316, with $2.898 and then $2.758 support.